Global Supply Chains and Small Business Trade Challenges (House Small Business subcommittee hearing, October 20, 2021)
Summary
Transcript of the House Small Business Subcommittee on Oversight, Investigations, and Regulations hearing Global Supply Chains and Small Business Trade Challenges, on October 20, 2021, published as Small Business Committee Document Number 117–037. Representatives Dean Phillips and Beth Van Duyne gave opening statements. Witnesses were Kevin Loe of Redi-Rock International, Chris O'Brien of C.H. Robinson, Christine Lantinen of Maud Borup Inc., and John "Chuck" Fowke of Homes by John C. Fowke Inc. for the National Association of Home Builders. The appendix adds material from Associated Builders and Contractors and the National Lumber and Building Material Dealers Association.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
Cite this document
“Global Supply Chains and Small Business Trade Challenges (House Small Business subcommittee hearing, October 20, 2021).”
Original at www.govinfo.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/global-supply-chains-and-small-business-trade-challenges-house-small-b-b2b9445c6a/
, SHA-256 0ce8e38c863e7d63d353b64bec9f5bfd72fa5afe9f929f76634da8e9440f480a.Full text
GLOBAL SUPPLY CHAINS AND SMALL BUSINESS
TRADE CHALLENGES
HEARING
BEFORE THE
SUBCOMMITTEE ON OVERSIGHT,
INVESTIGATIONS, AND REGULATIONS
OF THE
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
HEARING HELD
OCTOBER 20, 2021
Small Business Committee Document Number 117–037
Available via the GPO Website: www.govinfo.gov
U.S. GOVERNMENT PUBLISHING OFFICE
45–827 WASHINGTON : 2022
SBD026 with DISTILLER
Congress.#13
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 F:\DOCS\45827.TXT DEBBIE
HOUSE COMMITTEE ON SMALL BUSINESS
NYDIA VELÁZQUEZ, New York, Chairwoman
JARED GOLDEN, Maine
JASON CROW, Colorado
SHARICE DAVIDS, Kansas
KWEISI MFUME, Maryland
DEAN PHILLIPS, Minnesota
MARIE NEWMAN, Illinois
CAROLYN BOURDEAUX, Georgia
TROY CARTER, Louisiana
JUDY CHU, California
DWIGHT EVANS, Pennsylvania
ANTONIO DELGADO, New York
CHRISSY HOULAHAN, Pennsylvania
ANDY KIM, New Jersey
ANGIE CRAIG, Minnesota
BLAINE LUETKEMEYER, Missouri, Ranking Member
ROGER WILLIAMS, Texas
JIM HAGEDORN, Minnesota
PETE STAUBER, Minnesota
DAN MEUSER, Pennsylvania
CLAUDIA TENNEY, New York
ANDREW GARBARINO, New York
YOUNG KIM, California
BETH VAN DUYNE, Texas
BYRON DONALDS, Florida
MARIA SALAZAR, Florida
SCOTT FITZGERALD, Wisconsin
MELISSA JUNG, Majority Staff Director
ELLEN HARRINGTON, Majority Deputy Staff Director
DAVID PLANNING, Staff Director
(II)
SBD026 with DISTILLER
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00002 Fmt 5904 Sfmt 5904 F:\DOCS\45827.TXT DEBBIE
CONTENTS
OPENING STATEMENTS
Page
Hon. Dean Phillips .................................................................................................. 1
Hon. Beth Van Duyne ............................................................................................. 3
WITNESSES
Mr. Kevin Loe, Director of Customer Engagement, Redi-Rock International,
Petoskey, MI ......................................................................................................... 6
Mr. Chris O’Brien, Chief Commercial Officer, C.H. Robinson, Eden Prairie,
MN ......................................................................................................................... 8
Ms. Christine Lantinen, President and Owner, Maud Borup Inc., Plymouth,
MN ......................................................................................................................... 9
Mr. John ‘‘Chuck’’ Fowke, President, Homes by John C. Fowke Inc., Valrico,
FL, testifying on behalf of the National Association of Home Builders .......... 11
APPENDIX
Prepared Statements:
Mr. Kevin Loe, Director of Customer Engagement, Redi-Rock Inter-
national, Petoskey, MI .................................................................................. 39
Mr. Chris O’Brien, Chief Commercial Officer, C.H. Robinson, Eden Prai-
rie, MN ........................................................................................................... 41
Ms. Christine Lantinen, President and Owner, Maud Borup Inc., Plym-
outh, MN ........................................................................................................ 51
Mr. John ‘‘Chuck’’ Fowke, President, Homes by John C. Fowke Inc.,
Valrico, FL, testifying on behalf of the National Association of Home
Builders .......................................................................................................... 53
Questions for the Record:
None.
Answers for the Record:
None.
Additional Material for the Record:
ABC - Associated Builders and Contractors ................................................... 58
NLBMDA - National Lumber and Building Material Dealers Association . 62
(III)
SBD026 with DISTILLER
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00003 Fmt 5904 Sfmt 0486 F:\DOCS\45827.TXT DEBBIE
SBD026 with DISTILLER
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00004 Fmt 5904 Sfmt 0486 F:\DOCS\45827.TXT DEBBIE
GLOBAL SUPPLY CHAINS AND SMALL
BUSINESS TRADE CHALLENGES
WEDNESDAY, OCTOBER 20, 2021
HOUSE OF REPRESENTATIVES,
COMMITTEE ON SMALL BUSINESS,
SUBCOMMITTEE ON INVESTIGATIONS,
OVERSIGHT, INVESTIGATIONS, AND REGULATIONS,
Washington, DC.
The Subcommittee met, pursuant to call, at 10:02 a.m., in Room
2360, Rayburn House Office Building, Hon. Dean Phillips [chair-
man of the Subcommittee] presiding.
Present: Representatives Phillips, Davids, Mfume, Bourdeaux,
Chu, Evans, Craig, Luetkemeyer, Hagedorn, Stauber, Meuser, Van
Duyne, Donalds, and Fitzgerald.
Chairman PHILLIPS. All right. Good morning, everybody. I want
to call this meeting to order. And without objection, the Chair is
authorized to declare a recess at any time.
I would like to begin by noting some important requirements.
First, House and committee rules in practice will continue to apply
during hybrid proceedings. All Members are reminded that they
are expected to adhere to these standing rules, including decorum.
House regulations require Members to be visible through a video
connection throughout the proceeding, so please keep your cameras
on, and remember to remain muted until you are recognized to
minimize background noise. If you have to participate in another
proceeding, we ask that you exit this one and log back in later.
In the event a Member encounters technical issues that prevent
him or her from being recognized for their questioning, I will move
to the next available Member of the same party and will recognize
that Member at the next appropriate time slot, provided that they
have returned to the proceeding.
Lastly, in accordance with the Attending Physician’s most recent
guidance, all Members and staff physically present in the com-
mittee room today are required to wear masks in the hearing room
except when you are speaking, and that goes for witnesses as well.
Furthermore, all Members and staff who have not been fully vac-
cinated must also maintain 6-foot social distancing from others.
Members will, however, be allowed to briefly remove their masks,
as I said, if they have been recognized to speak.
With that, we shall begin with my opening statement. I want to
start by thanking our distinguished witnesses for joining us today
for this vital hearing on the state of the global supply chain and
its impact, grave impact on small businesses.
(1)
SBD026 with DISTILLER
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 F:\DOCS\45827.TXT DEBBIE
2
The ongoing COVID-19 pandemic is, what we hope, is a once-in-
a-generation crisis that has created massive economic challenges
for businesses and consumers alike.
An extraordinary increase in demand for goods has exacerbated
the many weaknesses in our supply chain, which predated this
pandemic and has inflicted chaos on supply chains worldwide de-
laying the delivery of critical goods and products.
The complexities of the global supply chain are often unseen and
unappreciated, especially in an age where consumers have come to
reliably expect rapid delivery of goods and products. That a port
closure in Shanghai can impact a hardware store in Chaska, Min-
nesota is not a reality that lends itself easily to a sound bite on
cable news or to political posturing in Washington.
We are here today because we have a duty to investigate the
challenges facing our small businesses and using what we have
learned come together to address them. As I mentioned, the
COVID-19 pandemic has exposed cracks that have long been
present at nearly every connection point in our global supply chain,
and this is adding considerable economic stress to small businesses
which are already suffering from the economic fallout of the pan-
demic.
COVID helped create the perfect storm for the disruptions that
we have seen over the past 19 months, adding to dwindling natural
resources, climate change, workforce development problems, trade
wars, and a lack of investment in our infrastructure, which is un-
dermining the entire foundation of the international and domestic
supply chain.
What is more, as our economic recovery has picked up, these
problems have worsened. Private businesses, whose operations
slowed during the height of the pandemic, are now struggling to
keep pace with the steep rise in demand as the economy roars back
to life putting even more stress on our supply chain.
All of these factors have combined to create difficult cir-
cumstances. Disruptions have led to supply shortages, backlogs in
major ports, and terribly severe delays in delivering goods, as we
all know. These disruptions are not only harmful to consumers;
they also can be disastrous for small businesses.
Small companies have limited inventories and cannot afford to
wait weeks or months for the products or supplies that they need.
At the same time, they often depend on lower prices from overseas
goods making the skyrocketing costs of imported materials prohibi-
tive.
These higher costs might be manageable for bigger enterprises
that can absorb the higher shipping costs and negotiate favorable
terms with shipping companies. Small firms engaged in inter-
national trade have no choice but to accept the prevailing market
rate.
Throughout the last year, surveys have shown that over half—
half of small business owners feel supply chain disruptions are
hurting their businesses. I have heard from many of them directly.
In fact, Ranking Member Van Duyne and I met with several per-
sonally, including one of our witnesses here today, when she visited
my district this past September.
SBD026 with DISTILLER
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 F:\DOCS\45827.TXT DEBBIE
3
So we must take a closer look at how weakened supply chains
are hurting small firms and our economy and what Congress can
do to strengthen them. By making our supply chains more resil-
ient, we can help ensure the uninterrupted flow of vital goods and
prepare ourselves for future potential disasters.
As part of that, I believe the federal government must work
closely with the private sector to find solutions—I stress, find solu-
tions. We understand the problems—to alleviate that pressure on
our supply chains. We also must look to existing measures that we
can utilize to help small businesses with issues surrounding supply
chain and foreign trade, which is one reason I look forward to hear-
ing more about SBA’s State trade expansion program that aids en-
trepreneurs as they market and sell their products overseas.
I am on a mission to get to the bottom of this issue, and I commit
today to work with Chairwoman Velázquez, Ranking Member Van
Duyne, and the White House to make certain that this administra-
tion is doing everything in its power to help small businesses
weather this terrible storm.
With that, I would like to yield to the Ranking Member, Ms. Van
Duyne, for her opening statement.
Ms. VAN DUYNE. Thank you very much, Mr. Chairman. And I
very much appreciate you gathering this subcommittee to discuss
such an important and timely topic.
Just last month, I appreciated the opportunity to tour businesses
in Chairman Phillip’s district, as he mentioned, and discuss how
supply chain problems are affecting businesses all across the coun-
try. These issues are particularly harmful, as the Chairman men-
tioned, to small businesses who lack the purchasing power, diversi-
fied supply networks, robust contingency plans, and pricing flexi-
bility to be able to compete with larger firms.
NFIB’s recent small business economic trends report found that
90 percent of small business owners saw supply chain disruptions
that are having an impact on their business. Additional reporting
has found that nearly 50 percent of all small businesses have expe-
rienced product delivery delays from their suppliers. Twenty-five
percent of all small businesses have succumbed to slower delivery
times to their customers.
And the same study also found that supply chain disruptions
might cause approximately 20 percent of all small businesses to
rethink their current supply chain. As ‘‘help wanted’’ signs are be-
coming a common site on the doors of small businesses in local
communities across the country and store shelves have become in-
creasingly bare, the American people are taking notice to these
Democrat-induced economic crises. For example, a recent survey
found that 85 percent of American adults are concerned that sup-
ply chain problems may lead to shortages of basic items.
And just let me give you a few examples that we have seen in
national news headlines recently: Wall Street Journal, ‘‘Supply-
Chain Bottlenecks, Elevated Inflation to Last Well Into Next Year’’;
NPR, ‘‘Dual Challenge: Combatting the Shortages of Labor Work-
ers and Supply Chain Breakdown’’; USA Today, ‘‘Grocery Store
Shelves Bare? These Products May Be Hard to Find Due to Supply
Chain Issues’’; New York Post, ‘‘Supply-Chain Woes Forcing Toy
Manufacturers to Scramble to Meet Christmas Demand.’’
SBD026 with DISTILLER
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 F:\DOCS\45827.TXT DEBBIE
4
In my home State of Texas, a local Dallas news headline reads,
‘‘Businesses Have Never Been This Stressful: Supply Chain Issues
Hurting Small Businesses in Dallas.’’
Supply-chain disruptions have left small businesses paying more
of their hard-earned money for goods that they may not receive for
months on end. The Job Creators Network September monthly
monitor poll found that higher prices coupled with inflation con-
tinue to be the leading concern for small businesses, and make no
mistake, Americans are paying more for just about everything.
The Biden administration’s labor crisis is also a key contributing
factor to the rising cost of goods and empty shelves. The worker
shortages have hindered the ability to get cargo to shore, unpack
these much-needed goods, and find truck drivers to transport the
products throughout the nation.
U.S. employers across all industries are struggling to fill more
than 10.4 million job openings to meet rising consumer demands.
And the NFIB reports that 51 percent of small business owners
have unfilled job openings. Again, 51 percent of small businesses
have unfilled job openings compared to a historic average of 22 per-
cent, which is a 48-year record high for the third consecutive
month.
America’s economy is being held hostage by Joe Biden’s supply
chain failures. Last week, the President’s very own chief of staff re-
ferred to inflation and supply chain disruptions as, quote, high-
class problems. Additionally, Secretary of Transportation made
jokes about supply chain issues and how they could impact Christ-
mas gift giving for all Americans.
This smug small business negligence within the Biden adminis-
tration is unfortunately a reality that will crush businesses all over
this country, that depend on increased sales and spending during
the holiday season. Simply put, small businesses are left to bear
the brunt of President Biden’s supply chain crisis.
Inflation is skyrocketing. Cargo ships stocked with thousands of
containers are circling U.S. ports with no available slips to unload,
and small businesses cannot find workers. And without the prod-
ucts or workers, store shelves across the country are becoming in-
creasingly empty.
And while we are holding this hearing, the Biden administration
continues to minimize this crisis and seems confounded by the seri-
ousness of our supply chain issues. The challenges that we are fac-
ing and this administration’s blatant inability to address it go far
beyond a slightly less Merry Christmas for the rich.
Supply chain problems are keeping not just toys but medical sup-
plies, oxygen containers, and basic necessity out of the hands of all
Americans. And when you couple this with the devastating infla-
tion and escalating energy costs as colder winter sets in, President
Biden’s policy will literally cost American live this winter. This is
the undeniable reality of what we face in the months ahead.
I look forward to hearing from our witnesses today, and I hope
to work with my colleagues on real solutions to support our small
businesses and secure America’s supply chain without enacting leg-
islation that authorizes large amounts of new money and fails to
combat overregulation, labor shortages, and taxation.
Thank you very much, Mr. Chairman, and I yield back.
SBD026 with DISTILLER
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00008 Fmt 6633 Sfmt 6633 F:\DOCS\45827.TXT DEBBIE
5
Chairman PHILLIPS. Thank you, Ms. Van Duyne. The
gentlelady yields back.
I would like to take a moment to explain how the hearing will
proceed. Each witness will have 5 minutes to provide a statement
and each committee Member will have 5 minutes for questioning.
Please ensure that your microphones are on when you begin speak-
ing and that you return to mute when you are finished.
With that, I would like to start by introducing our witnesses. I
begin with Mr. Kevin Loe, the sales director for Redi-Rock Inter-
national. Redi-Rock is the industry leader of large block retaining
wall systems and has been expanding its footprint across inter-
national markets, thanks in part to the SBA’s STEP program. Mr.
Loe has been instrumental in taking Redi-Rock from a business
from zero export sales to a global market leader. Prior to joining
Redi-Rock, Mr. Loe served with the United States Coast Guard.
Appreciate you joining us, Mr. Loe.
Our next witness is Mr. Chris O’Brien, the chief commercial offi-
cer of C.H. Robinson, a third-party logistics provider located in the
heart of my congressional district. C.H. Robinson is committed to
solving logistics problems for companies large and small across the
globe. Mr. O’Brien has been with the company since 1993 and has
worked his way up from a manager in Raleigh, North Carolina, to
president of C.H. Robinson’s European division to now senior vice
president and then—I sorry, and now chief commercial officer. And
we appreciate you being us with today, Mr. O’Brien, remotely.
Our next witness is Ms. Christine Lantinen, the president and
owner of Maud Borup, Incorporated, a woman-owned and veteran-
owned company reinventing classic sweets profoundly committed to
sustainability. Maud Borup, founded in Minnesota in 1907, has a
long and delicious history, including chocolate covered marsh-
mallows in my great grandmother’s drawer.
Ms. Lantinen purchased the company in 2005 and revitalized
and reinvigorated a great small business, which has brought about
150 different products to market. Ms. Lantinen has received nu-
merous awards for her work, including SBA Small Business Person
of the Year. We welcome you, Ms. Lantinen.
And now Ms. Van Duyne will introduce her first.
Ms. VAN DUYNE. Mr. Fowke is a Tampa-based, Florida-based
small business owner with 40 years experience as a custom home-
builder. Mr. Fowke is also the National Association of Home-
builders’ 2021 Chairman of the Board. He has been active in the
NAHB leadership structure at the local, State, and national levels
throughout his career. And as a senior life delegate, he has served
in the leadership of the association for more than 20 years.
He was named builder of the year by the Tampa Bay Builders
Association in 2006 and 2009 and is a past president and lifetime
director of the TBBA. He was also president of the Florida Home-
builders Association and continues to serve the association. In
2019, he was inducted into the FHBA’s Florida’s Housing Hall of
Fame, and he received the Florida Homebuilders Eagle Award in
2012.
Mr. Fowke joins us today as unprecedented increases in supply
chain disruptions and lumber prices have crushed the American
workforce over the past year and a half. As we have seen in more
SBD026 with DISTILLER
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 F:\DOCS\45827.TXT DEBBIE
6
recent weeks, these issues continue to harm small businesses,
homebuyers, and the housing industry alike. Homebuilders like
Mr. Fowke are facing prolonged delivery times, skyrocketing mate-
rial costs, and escalating labor shortages.
We appreciate you and the other witnesses for joining us today
as we explore this critically important and timely topic. And I look
forward to your testimony, and I yield back.
Chairman PHILLIPS. And I join Ms. Van Duyne in expressing
gratitude to all of you, and with that, we will begin with Mr. Loe.
You are recognized for 5 minutes.
STATEMENTS OF KEVIN LOE, DIRECTOR OF CUSTOMER EN-
GAGEMENT, REDI-ROCK INTERNATIONAL, PETOSKEY, MI;
CHRIS O’BRIEN, CHIEF COMMERCIAL OFFICER, C.H. ROBIN-
SON, EDEN PRAIRIE, MN; CHRISTINE LANTINEN, PRESIDENT
AND OWNER, MAUD BORUP INC., PLYMOUTH, MN; AND JOHN
‘‘CHUCK’’ FOWKE, PRESIDENT, HOMES BY JOHN C. FOWKE
INC., VALRICO, FL, TESTIFYING ON BEHALF OF THE NA-
TIONAL ASSOCIATION OF HOME BUILDERS
STATEMENT OF KEVIN LOE
Mr. LOE. Good morning, Chairman Phillips, Ranking Member
Van Duyne, and Members of the subcommittee. I thank you for the
opportunity to testify before you here today. I am truly honored to
be here. My name is Kevin Loe, and I am the director of the cus-
tomer engagement team at Redi-Rock International.
At Redi-Rock we believe in changing the world in concrete ways
by unleashing the possibility of people, products, and technology to
create large block retaining wall systems that you can trust for a
lifetime. Today we are working with 120 independently owned and
operated concrete manufacturers around 22 different countries
around the world that license the Redi-Rock precast product and
provide great retaining wall systems throughout.
We provide one integrated solution of wall solutions to create en-
gineered solutions behind the wall and natural stone appearances
on the face of the wall, creating like one-ton legos to build fast re-
taining walls.
Currently, Redi-Rock employees over 55 hardworking team Mem-
bers with positions in welding, production, marketing, engineering,
and finance and sales. We manufacture our products in beautiful
Charlevoix, Michigan, in export containers to different countries
around the world. Our headquarters is just down the road in
Petoskey, Michigan, and Little Traverse Bay on Lake Michigan.
I want to start by saying that because of the State Trade Expan-
sion Program, also known as STEP, and the U.S. Small Business
Administration and the Michigan Economic Development Corpora-
tion, MEDC, that Redi-Rock went from almost zero export sales to
becoming a global market leader in our industry. STEP was a cata-
lyst for us to invest our time and resources into international
trade, and as a result Redi-Rock has grown our export revenue to
more than $3.5 million in all these 22 countries.
These exports have allowed us the freedoms to get good-paying,
hardworking jobs, diversify our sales, increase our market share,
and continue manufacturing in the State of Michigan. This has al-
SBD026 with DISTILLER
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 F:\DOCS\45827.TXT DEBBIE
7
lowed us to work through the global pandemic without eliminating
any positions. We could not have achieved the success without the
support of the STEP grant in MEDC.
Just a quick story that goes with this is that our very first em-
ployee, Larry Pop, has been with the company since we started in
2000. As part of the international growth initiatives, Larry’s son,
Owen, now works for the company helping us in our manufacturing
facility, becoming our first and only multigenerational employee
working with us.
We are seeing similar generational success and impacts in the
international as well as in France. Our customer, Lashow Baton,
had a gravel business that struggled through the recession in 2008
and in the years following. When the next generation took over the
family business in 2013, they were hungry to innovate. That is
when they chose Redi-Rock. As a result, this family business has
seen year over year growth and is invited to the French palace to
receive an award for invitation from our product.
Redi-Rock has allowed small family businesses to thrive in the
next generation, and the STEP funding has been pivotal in helping
us empower small business growth here and also abroad. Small
businesses like us, we don’t have those resources to be able to navi-
gate the global market and export process. That is where our part-
ners come in handy with MEDC and the federal trade agencies
that are absolutely crucial and vital for a company like us to suc-
ceed in this market.
During the pandemic even, we quickly had to shift our operation
strategy to continue to grow our exports. Through the STEP pro-
gram and MEDC, we participated in several virtual trade tours
and events and looking at potential buyers in Australia and also
in Peru. We were able to utilize Zoom, build our relationships, and
in the end we secured a new customer in Australia because of the
work that they were able to do to help us. We are still working on
securing our exports in Peru. It is a work in process.
Typically, these sales would’ve required extensive travel and
these countries to take between 6 and 12 months to finalize. But
with the help of STEP and MEDC technology, we were able to se-
cure the export system.
I want to conclude by expressing my strong support for the STEP
program. It has been vital for our ability to grow as a small busi-
ness. We strongly support the reauthorization of the program and
continued funding of the STEP program. We would also advocate
to increase the funding to $50 million per year. This is good money
spent, and we so appreciate that as a small business.
In addition, we strongly support the bipartisan infrastructure bill
and investing in our aging infrastructure. This will help ensure we
can remain competitive in the global markets while also creating
support jobs here in Michigan.
Thank you to this committee, thank you for the opportunity to
appear here, and I look forward to your questions.
Chairman PHILLIPS. Thanks, Mr. Loe. You make me want to
buy a retaining wall.
Now, Mr. O’Brien, you are recognized for 5 minutes for your
opening statement.
SBD026 with DISTILLER
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 F:\DOCS\45827.TXT DEBBIE
8
STATEMENT OF CHRIS O’BRIEN
Mr. O’BRIEN. Thank you. Chairman Phillips, Ranking Member
Van Duyne, and Members of the Small Business Committee, thank
you for the invitation to testify at today’s hearing. As one of the
nation’s largest third-party logistics providers, C.H. Robinson has
a unique view on how goods and commerce flow from manufacturer
to consumer.
My name is Chris O’Brien, and I am the chief commercial officer
for C.H. Robinson. I joined the company 29 years ago, and I have
been the chief commercial officer since 2015. I am responsible for
overseeing our customer strategy, and I lead our marketing and ex-
ternal communications functions.
We were founded in 1905 and have grown to over 15,000 employ-
ees globally. We are Minnesota’s eighth largest publically held com-
pany headquartered in Eden Prairie. We serve customers of all
sizes, but we provide critical freight transportation services to over
60,000 small businesses and assign their freight to a network of
carriers that includes over 50,000 active small business trucking
companies. Freightquote by Robinson, based in Kansas City, in-
cludes a self-service tool made specifically with and for small ship-
pers.
In the global trade area we operate similarly. We simplify com-
plex international landscape for our customers by connecting them
to the world’s ocean and air freight capacity as well as customs and
trade support. We do not own any commercial trucks or container-
ships ourselves but rather build technology platforms and logistics
services that allow our customers to save time and money. This is
especially beneficial to small businesses who we empower with our
prebuilt tech to give them an advantage of larger companies.
The congestion in the supply chain has been well documented,
but I want to describe the factors that influence these outcomes.
Over the course of my 29-year career, the fundamentals have not
changed. Supply of capacity and demand for goods ebbs and flows
to create conditions either favorable for the flow of goods and lower
freight cost or conditions that challenge the flow of goods and in-
crease freight cost.
Economic growth, weather, labor availability, regulation, and
other factors push and pull on the demands of available transpor-
tation. Capacity in the form of trucks, drivers, ships, and sports ad-
just over time to these market signals. For example, right now we
are seeing the surge in formation of new small trucking companies.
What makes 2021 unique are the orders of magnitude in speed
with which the system has gone from one extreme to the other. The
world’s supply chain simply weren’t built to handle the nearly shut
down of early COVID followed by the rapid restart and the robust
consumer demand that followed.
The current supply chain congestion is creating challenges for
our large customers, but the impacts cause magnified personal
stress for small business owners. Like large businesses, small com-
panies have experienced significant and rapid freight cost increases
across all modes of transportation, shipment delays, port detention
charges, difficulty assessing available capacity, and supply chain
challenges have forced all business to make painful choices regard-
ing passing on increased cost to their customers.
SBD026 with DISTILLER
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00012 Fmt 6633 Sfmt 6633 F:\DOCS\45827.TXT DEBBIE
9
As many have said, the current supply chain challenges are com-
plex and with few easy fixes. We would encourage the committee
to focus on four primary areas: First, stimulative economic policy
in COVID reopening has driven surging demand across the econ-
omy. U.S. GDP growth has exceeded 6 percent for two quarters in
a row. Freight congestion and cost increases have naturally fol-
lowed. We feel that if economic growth continues at higher than
historic levels, trucking, ocean, air, warehousing, and port capacity
will be challenged to keep up.
Secondly, our industry has been dealing with a shortage of truck
drivers that predates COVID by decades. Policymakers can help
truck driver shortage by focusing on driver quality-of-life invest-
ments like truck parking, driver recruitment, and training. Many
new truck drivers and warehouse workers are recent immigrants
and there are opportunities to increase participation within that
workforce. We support both the DRIVE SAFE Act and the Women
in Trucking Workforce Act which would expand the driver pool.
The China trade war has increased costs in the form of tariffs
and high-price inputs on many small business. Small businesses
are asking themselves tough questions. Are tariffs likely to con-
tinue or expire? Congress and the administration can provide more
concrete signals to small businesses regarding the direction of the
trade war so they can make long-term decisions.
Immediate trade relief for small businesses was included in the
U.S. Innovation and Competition Act. The Trade Act of 2021 would
be retroacted to December 2020 and could mean section 301 exclu-
sion refunds of tens of thousands of dollars in duties for some small
businesses.
Next, COVID-related shutdowns in facilities here and especially
abroad continue to adversely impact supply chains. Lockdowns,
partial shutdowns of ports and manufacturers continue to add to
delays periodically and recently. Truck parts sourced from overseas
have also seen shortages from foreign factory shutdowns, and this
delays repair and takes capacity off the road.
Finally, many small businesses who hire mortar carriers are un-
aware of the risk they take in selecting them. Some shippers shy
away or exclude small trucking companies from business opportu-
nities to mitigate this risk. We would encourage Members to sup-
port H.R. 3042 to establish a mortar carrier selection standard to
increase safety and protect small businesses and shippers and
small business truckers.
Thank you for the opportunity to share our views, and we look
forward to the questions.
Chairman PHILLIPS. Thank you, Mr. O’Brien.
And now I recognize Ms. Lantinen for 5 minutes. You have got
to unmute.
STATEMENT OF CHRISTINE LANTINEN
Ms. LANTINEN. Thank you. All right. Chairman Phillips, Rank-
ing Member Van Duyne, Congressman Hagedorn, and Members of
the subcommittee, thank you for the honor of testifying today. Be-
fore I discuss my business supply chain challenges, I would like to
give you some background on myself and my company.
SBD026 with DISTILLER
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 F:\DOCS\45827.TXT DEBBIE
10
My name is Christine Lantinen, and I am the president and
owner of Maud Borup, a candy manufacturing and food gift com-
pany. We are a privately held, Minnesota-based business employ-
ing over 200 team Members. The company’s growth has been
strong and steady since I took ownership of the business in 2005,
and this year we are on track to grow sales by 75 percent.
Maud Borup is over 100 years old, and like me, it has deep ties
to Minnesota. I grew up a farmer’s daughter in Le Center working
as a server at the American Legion at the age of 13. I joined the
Army and attended basic training at the age of 17 and went on to
serve almost 10 years as a medic. I graduated from Minnesota
State University, Mankato, and after working my way up the cor-
porate ladder found myself in a unique position to acquire and lead
Maud Borup. Today, as a certified woman- and veteran-owned busi-
ness, we are deeply committed to our community, with our cor-
porate office located in Plymouth and our factory in Le Center.
I was asked to join today’s hearing to share my perspective and
experience navigating supply chain challenges. I would begin by
placing a spotlight on our workforce. My business faces a dire
shortage of workers. At 200 employees, we are down roughly 100
from our optimal number of staff.
Since December of 2020, we have instituted a 36 percent hourly
salary increase, and we still have trouble recruiting workers. Some
factors driving this situation are economic; our general community
maintains a low unemployment rate, almost a full percentage point
below the State average of around 4 percent. Other factors are geo-
graphic; we are located in proximity to peer businesses competing
in the same worker pool.
Perhaps most relevant to this committee is the factor of worker
development. Trade programs producing certified truck drivers,
welders, and other specialists are not producing workers fast
enough for businesses like mine to hire them. I urge this committee
to take a hard look at policy solutions to accelerate the pipeline of
trade certification and education programs.
To put it directly, the biggest and most immediate challenge to
my business’ supply chain is a lack of workers. The situation is so
severe that despite a purchase of 6 acres of land adjacent to our
lot, our business has put expansion plans on hold. Our desire is to
continue operating in our corner of Minnesota, but our current
workforce shortages are unsustainable.
Another supply chain challenge currently impacting our business
is the cost of transportation for goods and supplies. In August of
2020, the cost to ship a standard 40-foot shipping container was ap-
proximately $4,300. By August of 2021, that figure had exploded to
$30,000. Like our shortage of workers, this situation is also
unsustainable from a business management standpoint. We need to
see action to alleviate the bottlenecks mostly caused by labor short-
ages.
According to the U.S. Bureau of Labor Statistics, there are 100
million Americans not in the U.S. labor force. Forty-two percent, 42
million of that number, are retirees. The Fed classifies the U.S.
labor force as every U.S. citizen 16 or over who is not incarcerated,
in the U.S. military, or in a nursing or residential care home. Retir-
ees are considered part of the labor force.
SBD026 with DISTILLER
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00014 Fmt 6633 Sfmt 6633 F:\DOCS\45827.TXT DEBBIE
11
How can we incentivize retirees and others currently not working
but able to work to enter the workforce to help fill the 10.4 million
job openings America currently has? Bolstering participation is
critical for U.S. competitiveness and economic strength.
Lastly, I would be remiss if I didn’t mention a longstanding chal-
lenge to businesses like mine, not just in the chocolate and confec-
tionary industry but the broader food and beverage manufacturing
sector as well. I am referring to the U.S. sugar program, which con-
sists of a combination of domestic marketing allotments, tariff
freight quotas, guaranteed price support loans, and the Feedstock
Flexibility Program.
This labyrinth of policy is so convoluted I do not have the time
nor the expertise to walk you through it all. The result is that the
federal government restricts the supply of sugar to inflate prices.
American businesses that rely on a steady supply of sugar are thus
often forced to pay twice what our global competitors pay on the
global market.
Thank you again for the opportunity to testify today. I am grate-
ful for the subcommittee’s interest in my business, and I appreciate
you looking at the troubling set of urgent supply chain challenges
we are currently faced with. If you have any questions, I would be
happy to answer them. Thank you.
Chairman PHILLIPS. Thank you so much, Ms. Lantinen.
And with that, I recognize Mr. Fowke for 5 minutes.
STATEMENT OF JOHN ‘‘CHUCK’’ FOWKE
Mr. FOWKE. Thank you for the opportunity to be here today.
Supply chain disruptions have affected the homebuilding industry
profoundly. From record high lumber prices to severe shortages of
other building materials, the result has been lengthy delays or
postponed projects and dramatic price increases. This is further
harming housing affordability at a time when we face an ongoing
housing affordability crisis.
Coordinating the timely delivery of materials and products to the
build site is challenging under the best of circumstances. The
COVID-19 pandemic has roiled global supply chains making this
once challenging endeavor nearly impossible.
In May of this year, a widely regarded framing lumber index hit
a previously unthinkable all-time high of $1,500 per 1,000 board
feet. NAHB estimated at the time the dramatic rise in lumber
prices was adding nearly $36,000 to the price of the average new
single-family home and nearly $13,000 to the price of each new
multifamily home.
And while lumber prices began a sharp decline soon after, prices
began rising again in September and have increased by more than
40 percent over the past 6 weeks. Lumber pricing and availability
is just one of the many problems we face with the supply chain.
Supply chain challenges are driving scarcity and elevated prices
on almost every product or good or material that goes into the con-
struction of the American homes. According to the Bureau of Labor
Statistics, the average price of goods used as inputs to residential
construction has risen 13.2 percent thus far in 2021, more than tri-
ple the rate of the core inflation over the same period.
SBD026 with DISTILLER
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00015 Fmt 6633 Sfmt 6633 F:\DOCS\45827.TXT DEBBIE
12
While historically high prices and supply shortages remain a
challenge for all homebuilding firms, they pose unique challenges
for smaller firms. Among the unique challenges small firms face in
these times are volatility and uncertainty as well as the ability, or
more often the inability, to pass along these ever-increasing prices.
Without large economies of scale, small businesses generally can-
not negotiate bulk discounts. Builders have been forced to commit
to purchasing material such as lumber without knowing exactly
what the cost will be when delivered. The effects of the uncertainty
trickle all the way to the buyer, many of whom have balked at
projects at the last minute due to unexpected price increases.
At the core of today’s building material supply chain issues are
two fundamental problems: Barriers to trade and challenges associ-
ated with moving goods to their final destination. I applaud the
Biden administration for its action to date on the homebuilding
supply chain. Convening the homebuilding supply chain summit in
July was critical to identifying some of the issues facing home-
builders.
Prioritizing building materials and supplies is part of the Depart-
ment of Transportation’s hours of service waiver for trucking has
been helpful, but it is only a start. More can be done and should
be done. Congress and the administration need to consider steps to
reduce or move barriers to trade. This includes at least temporarily
suspending duties and quotas on a wide array of imported building
materials and goods, from Canadian softwood lumber to steel and
aluminum.
In addition, Congress and the administration must continue to
aggressively explore solutions to port congestion and the persistent
delays in truck and rail transportation. Building materials, supply
chain challenges exposed and exacerbated by the COVID-19 pan-
demic are driving an unsustainable increase in the cost to con-
struct a new home.
Until we address all the underlying causes of the crisis, millions
of households are denied the American Dream of homeownership
and millions more are rent burden. Housing has been a bright spot
for the U.S. economy as the nation continues to recover from the
COVID-19 pandemic. But historically high lumber and building
material prices continue to serve as headwinds for the U.S. housing
sector.
And there is mounting evidence that housing is at risk, has seen
a dramatic increase in the cost of materials.
One sign that the market may be slowing down is the number
of housing units, permitted but not started, has risen over 40 per-
cent in the past year. Any slowdown in housing production would
be troublesome as we remain well off the mark of making up the
shortages from under building over the past decade.
I commend Chairman Phillips and Ranking Member Van Duyne
for holding this important hearing today, and I look forward to an-
swering any questions you may have for me. Thank you.
Chairman PHILLIPS. Thank you, sir. And thank you to all of our
witnesses for being with us today. There are current and former
small business owners on both sides of the aisle on this committee,
and rest assured, we share your pain, we empathize, and I hope
SBD026 with DISTILLER
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00016 Fmt 6633 Sfmt 6633 F:\DOCS\45827.TXT DEBBIE
13
I speak for all when I say our obligation and intention is to identify
solutions today.
With that I will begin by recognizing myself for 5 minutes. We
pointed out the problem. I don’t think we need to keep identifying
what is wrong. Mr. O’Brien, I am going to start with you.
You identified four areas that are causing the supply chain
issues, surging demand, a trucker shortage, the China tariffs and
a trade war, COVID-related shutdowns are the four that I believe
you referenced.
You know, my intuition tells me that today you might hear from
certain Members of this committee that Joe Biden is responsible for
this whole problem, the Biden administration’s policies have led to
inflation and supply chain issues and labor shortages and the like.
You might even hear some say it was the former administration.
The fact of the matter is, I don’t care who is responsible; I want
to find solutions.
So with that, Mr. O’Brien, you know, can you point to a policy
of either the past Trump administration or the current Biden ad-
ministration that you believe is, A, responsible for the issue that
we are now facing relative to supply chains, and if so, how do we
fix it?
Mr. O’BRIEN. I can’t point to any specific policy—thank you for
the question, Representative Phillips—but I would say that it is—
this is a long-term sustained problem. The current demand—the
other thing I would talk—describe is that this has been an unprec-
edented inversion of supply demand.
This is a very unnatural event when you talk about—the world’s
supply chain, the world’s economy simply wasn’t built to shut down
and restart and then deal with increased demand, a whole new
product set that really occupied the global shipping lanes for the
first several months was PPE.
But I will say that this demand has exposed long-term
chokepoints in the supply chain. And today, you know, it started
with manufacturing and it had to restart, but it has exposed other
physical and infrastructure challenges throughout the supply chain
from our ports to available chassis to the draymen that haul con-
tainers out of a port.
I mentioned in my testimony the one longest term—so every 4
or 5 years we have seen a port slow down when demand is high.
We have never seen anything like this. But really in every period
of increased demand we have dealt with truck driver shortage.
So if there is one area that I would want the committee to focus
on the most, it is the part of the supply chain crunch that has been
the most enduring and problematic.
The additional benefit is that it will benefit both the inter-
national supply chain and the domestic supply chain. Many small
businesses rely on North American trucks. Our job is to consolidate
that small carrier group and bring access to them to small ship-
pers.
So like I testified, I would say anything that we can do like the
DRIVE SAFE Act and the Women in Trucking Workforce Act to in-
crease supply. It is no secret that truck driving is a business that
is not attracting adequate labor, and anything we can do to help
SBD026 with DISTILLER
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00017 Fmt 6633 Sfmt 6633 F:\DOCS\45827.TXT DEBBIE
14
the lifestyle and improve the attractiveness of that role is impor-
tant, and I think anything else to address the other supply chains.
I would just say, it has been a long-term challenge, and today’s
crunch has just magnified it and brought it to all of our attention.
But over the long haul, disruptions like this are unusual. And the
international, the global, and the domestic supply chains have been
resilient, but probably the weakest link is North American trucking
due to the driver shortage that we have had for years.
Chairman PHILLIPS. And, Mr. O’Brien, is it also fair to say that
our infrastructure is not as sound and robust as some of our inter-
national peers relative to ports? And also a lack of an integrated
communication system between ports and customs and the like, is
that an area in which we can improve?
Mr. O’BRIEN. That is an area that we can improve. Compared
to other world-class ports, ours are backed up more right now, and
we have less automation and less adequate communication pro-
grams at our ports. So I would agree that there is an opportunity
to invest there as well.
Chairman PHILLIPS. And would you say that the—I think it is
$17 billion or $18 billion in the bipartisan infrastructure bill dedi-
cated to port improvement, would that help?
Mr. O’BRIEN. I think anything that we can do to improve infra-
structure, especially transportation infrastructure, is helpful, not
just at the ports but across our highways, our intermodal systems,
our rail terminals, anything that can reduce those, you know, end-
point supply chain chokepoints that we have today.
Chairman PHILLIPS. Okay. Well, hopefully we will be voting on
that soon in the affirmative.
With that, my time is expiring, so I will turn to my friend and
Ranking Member, Ms. Van Duyne, for 5 minutes.
Ms. VAN DUYNE. Excellent. Thank you. And it is good to see
so many of you that we visited with when I was up in Minnesota
last month.
I want to ask, Mr. Fowke, I understand that you referenced the
limitation of pricing flexibility for small businesses.
President Biden’s recent announcement mentioned that commit-
ments from large companies like UPS and FedEx, Wal-Mart, and
Target to use expanded hours to move goods. But can you walk us
through, from the ports to the trucking company to the supply
house to the builder, how small businesses continue to be harmed
and left out in times of supply chain shortages?
Mr. FOWKE. Well, the biggest challenge we have with the sup-
ply chain is the production of goods, and then once the goods are
produced having them tracked or delivered to the sites has become
a bigger challenge.
Inventories are low for materials. But having UPS and FedEx
ramp up their delivery process doesn’t do a lot for the challenges
that we have with lumber, labor, and things of this nature that are
handicapping our industry and creating a shortage of new houses
which has put a stress on existing housing stock, and therefore, the
possibility of affordable housing has left the scene.
Ms. VAN DUYNE. I was going to ask you, I know that you did
a great job in your testimony talking about the impacts actually on
homebuyers. Do you want to just kind of just run down very quick-
SBD026 with DISTILLER
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00018 Fmt 6633 Sfmt 6633 F:\DOCS\45827.TXT DEBBIE
15
ly how the supply chain shortages within the homebuilders indus-
try is directly affecting consumers?
Mr. FOWKE. Well, it affects every price level in housing in some
fashion. Affordability is the biggest thing that we are affected by.
Housing affordability is always a challenge. You know, in my busi-
ness, if people come to me to have a home built, they want to have
an idea what the house is going to cost.
And over the past—you know, I have been doing this a long time.
And, you know, every year in January we get a letter from sup-
pliers that there is increases. For the last 12 months, we get letters
about increases not every 30 days but every week. So to be able
to identify the cost of a house is almost impossible, so therefore the
entry level home buyer is being pushed out of the market.
The $36,000 that lumber added to the price of a home, if you do
the math, for every $1,000 increase in price of a home, 150,000 peo-
ple are pushed out of the market. They can no longer afford the
American Dream. So if you do the math, the $36,000, the impact
for lumber alone.
But the challenges we have as builders, to better answer your
question, trying to schedule material has become virtually impos-
sible. I ordered windows last year in November. The windows were
delivered to the job site in June. And in the sequence of construc-
tion, you cannot produce the home and construct the home without
having the windows installed.
And so that is just one of the simple things. You know, the abil-
ity to get appliances, the ability to just get cabinets, and if you
can’t get the cabinets, you can’t put the countertops on, so there-
fore, you know, these things have been slowed up. And anybody
and everybody that works in this industry is in dire need of added
labor. We have got to do something about the labor situation that
will help us with the supply chain.
If the supply chain disruption continues and prices continue, in-
flation is going to hit us; therefore, Chairman Powell is going to
raise interest rates. And our entire economy is going to come to a
screeching halt if something isn’t done quickly to get people back
to work.
Ms. VAN DUYNE. I appreciate that answer and you definitely
answered my question.
My first question had to do with how this is affecting small busi-
nesses. We know some of the larger businesses, larger companies,
multinational companies are being able to work around some of
these issues directly because they have got the capability. How are
you seeing this affect small businesses the most because they don’t
have those capabilities?
Mr. FOWKE. Well, the large companies buy in bulk and they de-
sign and build in bulk. Small firms, small building firms—and just,
for instance, you know, the National Association of Home Builders
is built up of—we have 30,000 builder Members. And these builder
Members build about 80 percent of the houses built in this country.
We alone, when the pandemic hit, we alone carried the nation’s
economy on our back with our industry. But with small firms build
80 percent of the houses are handicapped in production, the ability
to buy in bulk or even the ability to forecast when materials can
SBD026 with DISTILLER
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00019 Fmt 6633 Sfmt 6633 F:\DOCS\45827.TXT DEBBIE
16
be delivered, makes it virtually impossible to run a business much
less tell a buyer what the price of a home is going to be.
The large builders can buy in bulk and move materials around
where needed where we don’t have those opportunities as small
businesses. So in Tampa, it is a little different because the large-
volume builders build about 70 percent of the houses in Tampa
Bay, and that is not, you know, the—similar to in other parts of
the country and other regions of the country. But——
Ms. VAN DUYNE. My time is up.
Mr. FOWKE. Okay.
Ms. VAN DUYNE. I am sorry. I apologize, and thank you for an-
swering. I yield back.
Chairman PHILLIPS. The gentlelady yields back. And now I rec-
ognize the gentlelady from California, Ms. Chu, for 5 minutes.
Ms. CHU. Thank you.
Mr. O’Brien, as a representative from the Los Angeles area,
which is home to the L.A. and Long Beach ports, which together
process 40 percent of all shipping imports into the U.S., I have
countless constituents whose businesses are impacted by day-to-
day conditions at the port. I understand that many of the shipping
delays are attributable to supply and demand issues, but it is un-
deniable that some of these disruptions are due to anticompetitive
and unfair practices by shipping companies.
For instance, at the port of Los Angeles and Long Beach, we
have seen many shipping containers refuse to load exports from the
U.S. because they will make more money sending empty containers
back to foreign ports with the highest demand. Some will not even
allow containers to be sent inland to collect agricultural products
because they would rather immediately load those containers back
onto ships.
The federal Maritime Commission is responsible for protecting
American exporters and importers from anticompetitive activities,
but they lack the authority to take concrete action. That is why I
have cosponsored H.R. 4966, the Ocean Shipping Reform Act of
2021, which would give FMC the authority to enforce import and
export logistics and implement minimum safety standards, as well
as prohibit ocean carriers from unreasonably declining opportuni-
ties for U.S. exports.
So can you talk about how anticompetitive behavior in the ship-
ping industry has contributed to the current supply chain disrup-
tions and discuss whether the federal government can step up its
enforcement? Do these types of anticompetitive behaviors result in
greater hardships for small businesses than larger ones?
Mr. LOE. Thank you, Representative.
Mr. O’BRIEN. I will start with the basics on the export economy,
in that containers have always gone back to empty to source of ori-
gin. And the greatest problem there and what drive that is a lack
of balance trade that the United States has. So since
containerization steamships have not made the choice to turn back
empty containers but they have brought them back, and I think
some of the demand for returning those containers empty today is
driven by our own demand for these urgent imports that we have
today.
SBD026 with DISTILLER
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00020 Fmt 6633 Sfmt 6633 F:\DOCS\45827.TXT DEBBIE
17
I am not aware, from any of our customer situations, where they
have seen illegal activity or had containers refuse to get loaded. I
do think, if that is going on, we are curious and looking forward
to hearing more about the Ocean Shipping Reform Act. And if
there is the possibility in that, you know, to empower, if things like
that are happening, I do believe that them having the power to in-
vestigate that is a good thing. But from the beginning of inter-
national trade, it is our trade balance that has, for rational rea-
sons, sent containers back to Asian manufacturing centers empty.
Ms. CHU. Well, I certainly do hope we have ocean reform be-
cause we do have American exporters frustrated with higher
freight rates for shipping companies and increased tension between
shippers and ocean carriers over fees and the availability of con-
tainers.
Nonetheless, let me talk about another issue, which is the fact
that there are changing consumer trends that are increasing the
demand. In fact, U.S. retail sales increased by 8 percent between
2019 and 2020 and another 14 percent between 2020 and 2021. So
Americans have shifted much of their consumption away from serv-
ices and towards goods, the majority of which are imported.
So the demand that we are seeing at ports like Los Angeles and
Long Beach might be a long-term trend that is here to stay, so it
is important that we focus beyond the ports at ways improving ca-
pacity along the entire supply chain.
I first want to thank President Biden for taking action in south-
ern California to move our ports to 24/7 operation so that we can
clear the backlog, but he can’t solve the problem by himself. For
example, 60 percent of the goods coming through the ports transit
through my district in the San Diego Valley via train and truck.
We need containers to be emptied and restocked at the ports, but
we also need better, cleaner ways to quickly move these goods to
warehouses and businesses. And, in fact, there was a survey from
the National Retail Federation which said—had 22 percent of the
Members said that they were experiencing intermodal rail delays
and that 3 weeks had been added to their supply chains.
Anyway, both the Senate infrastructure bill and the Build Back
Better Act will help transform our ports to meet these new con-
sumer patterns. But can you talk about other measures that Con-
gress should be thinking about to increase our capacity to move
and process these goods domestically?
Chairman PHILLIPS. Ms. Chu, unfortunately, your time is ex-
pired.
With that, I yield to Mr. Hagedorn, the Ranking Member on the
Subcommittee on Underserved Agricultural and Rural Business
Development. Mr. Hagedorn, you are recognized for 5 minutes.
Mr. HAGEDORN. Thank you, Mr. Chairman. Appreciate that.
Ranking Member Van Duyne, good to be with you.
Thanks to the witnesses.
I mean, I appreciate this hearing. It is a good topic, very impor-
tant, timely. But I would just encourage my friends on the other
side of the aisle that if you want to stop the bleeding of this whole
supply chain issue and inflation, let’s quit micromanaging the econ-
omy, let’s quit dumping cash into the economy at a time when busi-
SBD026 with DISTILLER
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00021 Fmt 6633 Sfmt 6633 F:\DOCS\45827.TXT DEBBIE
18
nesses aren’t ready to respond and spurring more inflation, short-
ages of products, services, labor, you name it.
I don’t think this bill that is coming along, $3.5 trillion, whatever
it is, with all sorts of taxes, regulations, higher cost energy, I mean,
I don’t know a small business out there that says higher-cost en-
ergy is going to do the trick. And then, you know, more government
spending without any work requirements or technical training re-
quirements for people on welfare, those things all have been
stripped out. I tried to put that back in the Ag Committee. Voted
down. I don’t think that is the way to go.
And, by the way though, Mr. Fowke, I appreciate you being here.
The homebuilders have supported a piece of legislation that I have
introduced to help people get technical training certificate pro-
grams and things like that. Our bill would allow people that have
saved for 529 education savings accounts to not just use those mon-
eys for their kids to go to a 4-year college but to also go to voca-
tional school and things like that. I know, you know, you need a
lot of those types of skilled workers. Is that still something you
support, and do you think it would be a step in the right direction?
Chairman PHILLIPS. Sir, turn on your microphone, if you
would. Thank you.
Mr. FOWKE. We are working very hard to train our individuals
in our industry. We are an aging industry. For every five people
we lose, whether it is retirement or for whatever reason, we are
only able to replace them with two right now. And any type of leg-
islation that will help us with training is very, very important.
Mr. HAGEDORN. Thank you.
Ms. Lantinen, and I note for the record that your headquarters,
I guess your manufacturing facility, is in Le Center where you
grew up. It is in our district, in southern Minnesota, and I have
toured it many times. Very impressive. You have been expanding
there. And your success is quite something. I think you started
your business when you bought it with about $100,000 in sales,
and now you are up to about $45 million. That is quite an increase,
so congratulations on that.
What do you think about the workforce shortages? Do you have
any ideas that maybe we could address here at this committee or
across the nation as to how we can help?
Mr. LOE. Hi, Jim. First and foremost, hope your health is is
well, as always. I think the most important thing we can do right
now is dive into the 100 million Americans currently not in the
workforce. Forty-two percent of them are retirees. How do we tar-
get that group which is a huge portion of potential workforce we
could tap into, provide them with incentives? Can they work tax
free up to a certain dollar amount? Are there further Social Secu-
rity benefits we could give them for coming back to work?
I feel like we need a Rosie the Riveter character focused at retir-
ees that says ‘‘We Need You’’ as the tag line. And we really need
to focus on these potential groups that could be contributing to our
society because we will fall behind if we don’t have the employees
to run our businesses.
Mr. HAGEDORN. Many of the businesses I speak with in south-
ern Minnesota tell me that they just sometimes can’t compete with
the federal government. There is so much money out there flowing
SBD026 with DISTILLER
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00022 Fmt 6633 Sfmt 6633 F:\DOCS\45827.TXT DEBBIE
19
from the federal government. It was enhanced unemployment com-
pensation. Now it is a number of different areas, and I think that
is still an issue.
I go back to work in technical training requirements for welfare.
It works every time that we implement it. We have gotten away
from that. Some people say that it is tough for folks to get back
in the workforce because they lose benefits, and there is some
short-term loss because there is so much out there.
So I am a proponent of transition wages, whatever we have to
do in order to get people the incentive to get back to work. It is
much more compassionate than having people dependent on gov-
ernment. The compassion is letting folks—giving them the incen-
tive in order to go out there and care for themselves and to be in
the workforce contributing. So that is something that I will con-
tinue to do.
Mr. Fowke, any other comments that you have? I appreciate
what you said about supply chain issues and trade. And yet, I un-
derstand we had a deal with China and other countries. We are
trying to sort that out. But maybe in this short period of time we
need to do some things to alleviate that, but—I have got 20 seconds
left.
Mr. FOWKE. We just have to get people back to work. We have
an arm of our association, the Homebuilders Institute, we are
training military veterans that are acing the military back into
public life. We are trying to train incarcerated people. We are try-
ing to get training back into the schools, where it should be, so
younger people can learn trades that not only would teach them
how to work in the homebuilding industry but it will help them
with their lives long range.
Mr. HAGEDORN. Thank you. I am out of time. Again, I appre-
ciate your support for our bill.
Mr. FOWKE. Thank you, sir.
Chairman PHILLIPS. And now I recognize my colleague from
Minnesota, Representative Craig, for 5 minutes.
Ms. CRAIG. Well, good morning. The Small Business Committee
is well represented by Minnesota certainly each and every day.
Thank you so much, Chairman Phillips, for yielding, and thank you
to all of our witnesses today.
A special thank you and welcome to Mr. O’Brien and Ms.
Lantinen. It is always nice to hear from fellow Minnesotans here
on the committee.
I am really grateful that our subcommittee is holding this impor-
tant hearing today. Every single week I hear from different busi-
nesses in Minnesota’s Second Congressional District whose bottom
lines are being impacted by disruptions to our global supply chains.
But supply chain shortages aren’t only impacting businesses. I
have also heard from schools in my district who struggle to offer
balanced lunches because of shipping delays and, of course, from
customers who are facing higher costs on household items.
A strong and resilient supply chain is absolutely vital to keeping
our economy moving, which is exactly why I cofounded the bipar-
tisan Supply Chain Caucus last Congress, and this was before the
pandemic. In the months to come, I do hope that this bipartisan
group can come together and identify commonsense solutions to
SBD026 with DISTILLER
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00023 Fmt 6633 Sfmt 6633 F:\DOCS\45827.TXT DEBBIE
20
help resolve these ongoing challenges and deliver relief to the
American people.
Many of these supply chains, Mr. O’Brien, as you certainly know,
are really run by the private sector. There is certainly a number
of contributing factors involved. It is not simple, although it is real
easy, just to kind of throw a political barb back and forth and
blame one party or the other or one administration or another. We
know that these supply chain issues are very, very complicated,
and it is going to take more than a slogan or a political barb in
order to solve them.
So we have certainly, Mr. O’Brien, seen the cost of moving prod-
ucts into rural America and, of course, the Midwest especially on
the rise. You mentioned in your testimony one issue you are seeing
is a shortage of truck drivers. I am really proud to represent Da-
kota County Technical College, which offers a Class-B CDL truck
and bus driver training program. How could programs like this
help bolster our supply chain?
So Mr. O’Brien, you first.
Mr. O’BRIEN. Thank you, Representative. I think anything that
we can do to get more drivers into the workforce is beneficial.
Training is an area of current demand. A lot of the training pro-
grams and truck driver certifications, you need to get a commercial
driver’s license. A lot of those programs shut down during COVID
and that led to a delay, and I think anything that involves out-
reach.
Like I said, it is no secret that it is a challenging job. You are
away from home, you have other choices. Today you can’t become
a commercial driver for—in trucking until age 21. That keeps many
potential drivers out of the workforce where they find an alter-
native trade that doesn’t keep you on the road for most of the time
and away from families. So not only do we support both coopera-
tion between the private sector and public on solving these prob-
lems, we particularly see the need for additional programs for driv-
er recruitment and training.
Ms. CRAIG. Thank you so much. I would love to turn now to Ms.
Lantinen. First of all, thank you so much for your service to our
country in the U.S. Army and for taking time to appear before us
today, especially with Halloween so close and the holidays quickly
approaching. I am sure that Maud Borup is hard at work preparing
for a busy time this time of year.
How have you seen supply chain challenges in the food supply
industry? And, of course, what do you think Congress can do to
help either do or get out of the way and not do?
Ms. LANTINEN. Thank you, Congresswoman Craig. We are
starting to see everything go up. You know, the cost of plastic con-
tainers, the cost of food. I truly believe a year from now everything
we buy will be 35 to 40 percent higher. It is going to take longer
for it to catch up at the register.
I would say as I have spoken with people in the industry, a large
part of it is driven by shortages of workers. So we are all struggling
to either quickly automate to keep up with increased demand or do
whatever we can do to find people.
The shortage of people isn’t just in the U.S.; it is actually a
worldwide struggle right now happening. So I feel like the U.S. has
SBD026 with DISTILLER
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00024 Fmt 6633 Sfmt 6633 F:\DOCS\45827.TXT DEBBIE
21
a really unique opportunity for advancement right now as everyone
is struggling on a global level.
What are we doing to tap into our workforce that is here and try-
ing to find those pockets of people and how we can get them out
and working and contributing to society is really key right now.
Ms. CRAIG. Thank you so much, Ms. Lantinen. And, unfortu-
nately, I am out of time.
So, Mr. Chairman, I will yield back.
Chairman PHILLIPS. The gentlelady yields back. And now I rec-
ognize Mr. Meuser from Pennsylvania, the Ranking Member on the
Subcommittee on Economic Growth, Tax and Capital Access.
Mr. Meuser, you are recognized for 5 minutes.
Mr. MEUSER. Thank you, Chairman Phillips, very much and
thank you to the Republican Leader Van Duyne for holding this
hearing, and thanks to all of you for being here with us. We appre-
ciate you taking the time away from your business and your
homes.
So small businesses are not happy throughout my district and
throughout Pennsylvania, and wherever else I speak to businesses.
I was in business for many years, friends that are owning small
businesses nationwide, workforce issues as are being described
here, costs are going up randomly, very difficult situation. Con-
tainer costs, as we are talking about, have gone up from $3,000
less than a year ago to $27,000, $28,000 with no reliability in deliv-
ery. Demand is up, supply is low, particularly products made in the
U.S.
So you—on top of all of that, the supply side of your business,
your industry you have got upset customers, you have got cash flow
problems because you are trying to buy things—if you get a pre-
paid discount, you are sending those checks in to making those
payments to try to expedite your deliveries or your scheduling has
got to be random, all of your scheduled services and installations
and anything related to building is all over the charts. You prob-
ably have people showing up to do the job, but the parts and every-
thing else aren’t there.
So everybody is pulling their hair out. I mean, businesses are
breathless, as I put it, because every time I get them on the phone,
they sound breathless. And that is—we are on the Small Business
Committee, we got to do what we can here to correct things.
Now, of course, we have the port and part of that was due to
COVID, a lot of it was due to mismanagement, a lot of it was due
to government disruption. So—and that is where, perhaps, we can
come in. And yet as a Christmas present, our—on the Democratic
side of our Congress wants to tax you more and have some unclear
vaccine requirements, which I am all for the vaccine, but the guide-
lines, as you all well know, would—are not clarified at this point.
So people don’t know if they are going to be laying people off
come November 8th or not. No matter how many times I ask the
administration for those guidelines, we don’t get them.
So let’s get to some questions from the real world, which is where
you all work and live. So offer me, offer me, Mr. Fowke, the work-
force availability. What do you see? You brought up a couple of
ideas that were well thought out. Relate it to workforce, what can
federal/state government do to improve the workforce climate?
SBD026 with DISTILLER
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00025 Fmt 6633 Sfmt 6633 F:\DOCS\45827.TXT DEBBIE
22
Mr. FOWKE. Well, if you pay a man to not work, why would he
work? The headwinds that we see in the near future for the home
building industry is lack of labor. So it is simple. We need to get
people back using their hands, showing up to work, helping us
produce materials, helping us get jobs done in the field. And if we
have to incentivize people to get them to work, whatever we got to
do. The supply chain issue is not going to resolve itself. It is going
to take some effort to get people back out to work.
Mr. MEUSER. You think there is more government necessary for
more stimulus dollars and more regulations and other government
involvement or perhaps should government back off and allow the
open free markets to work?
Mr. FOWKE. Well, there is certainly always needs for the gov-
ernment to help people, but in this case, I think anything that con-
tinues to happen in the manner it has been happening is going to
simply delay things and pull the hand brake on our economy.
Mr. MEUSER. So what about the Safe Truck Act. That is a spe-
cific bill. I will open that up to anyone, maybe Ms. Christine
Lantinen. You deal with quite a few imports and trucking issues.
The Safe Truck Act would add to our trucking work shortages,
workforce shortages allowing those between the ages of 18 and 21
to drive on an Interstate basis. That is just one legislation that
really isn’t moving here in the House that has got a lot of cospon-
sors on both sides. That would be something I would think would
help make a difference.
Are you folks familiar with that?
Chairman PHILLIPS. Mr. Meuser, I am sorry. Your time is ex-
pired.
Mr. MEUSER. Oh. My apologies.
Chairman PHILLIPS. We might have time to come back to a sec-
ond round, in which case, we will get back to you. I promise.
Now I recognize the gentleman from Maryland, our Chairman—
our Vice Chair of the Committee and Chairman of the Sub-
committee on Contracting and Infrastructure, Mr. Mfume, for 5
minutes.
Mr. MFUME. Thank you very much, Mr. Chair. My thanks to
you and to the Ranking Member for holding this hearing. I want
to also add my appreciation and thanks to the witnesses for being
with us today.
Mr. Chairman, I heard something earlier that I want to actually
start with and hopefully end with because it is exactly what I think
the biggest issue is and the one that we have got to figure out how
to get our hands around and that is the inversion of the supply de-
mand model, which we all grew up with which we learned about
in our first economics class and which is the way we run our house-
holds and run our lives.
I can’t ever remember a time in history when that has been in-
verted, where one side dictates to the other in a way that has never
happened before. So that inversion to me, I believe, is the one thing
that we have got to come to grips with and figure out how we re-
verse it. Now there are a lot of people who hadn’t been paying at-
tention to supply demand issues because they have got other
things, quite frankly, that they are dealing with, but when many
looked up and saw 100 ships and containers off the coast of Cali-
SBD026 with DISTILLER
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00026 Fmt 6633 Sfmt 6633 F:\DOCS\45827.TXT DEBBIE
23
fornia because they couldn’t get unloaded, it started people asking
why.
Here in Baltimore, our ports are backed up also, not to the same
extent, but it is the same issue. It affects all of us. And I think in
listening to some of the discussions today and some of the ques-
tions, probably we do ourselves a service by getting away from
stereotypes and trying to find a way to get to solutions.
I heard one of my colleagues on the other side talk about the way
to fix this is to put work requirements on people who are receiving
welfare. Well, people who are receiving welfare were receiving wel-
fare before the pandemic. Most of them don’t want to be on welfare.
Most are White and female and they are taking care of families as
best they can. So this quick-fix notion of let’s put some work re-
quirements on these people, I think, gets us past where we ought
to be. It doesn’t give us a solution; it gives us a slogan.
And if we talk about, as I have heard some of the witnesses say,
they are recognizing the fact that ultimately they will continue to
have to pass along prices to consumers, I understand their pain in
that regard because it doesn’t help them. It reduces the amount of
business that they are able to do; it doesn’t increase it.
And right now we have heard this morning from some of the
leading economists in the nation that the average family has a cost
of $175 more to be able to take care of goods and services in their
household than they did last year. Those same economists are say-
ing that we will be in this inflationary trend at least through the
first quarter of next year. And if that is the case, it cries out for
immediate kind of actions.
I want to commend Representative Chu for her legislation in this
regard. I think it takes us a long, long way and I am hoping that
we can pass that soon. And this issue of a lack of workers is impor-
tant. I am listening to the discussion about truck drivers, in par-
ticular, and I could not agree more that we don’t have enough and
that we have got to find a way to make that particular occupation
more desirable for the people who are in it and the people who are
looking at trying to get in it.
And some of the things that we have to do in that regard, as
someone said earlier, is to look at wages and to look at the taxation
that we put on those persons. Well, every one of those things has
an economic consequence, so unless we are prepared to go headfirst
into this, recognizing that we have to, in some instances, spend
money in the area of truckers and truck driving in order to reha-
bilitate and to recreate an occupation that people want to go into,
we are going to be fighting this one for a long, long time. We have
got to be proactive and sometimes proactive means, in fact, invest-
ing.
Now, the issue of incentivizing workers, I would like to go to
that. I think it was—well, I don’t remember who—I think Ms.
Lantinen who brought it up, is something that has some immediacy
to it. And when you talk about incentivizing and retirees, it has got
to be to the extent where those retirees, in my opinion, feel like it
is in their best interests.
So that is something, I think, that is very valuable. I think it is
a great solution. It requires expediency. We have got to move on
it because this situation continues to languish, but even beyond
SBD026 with DISTILLER
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00027 Fmt 6633 Sfmt 6633 F:\DOCS\45827.TXT DEBBIE
24
this situation, I have always been an advocate of incentivizing re-
tirees to help in whatever particular industry or area of expertise
they have come out of. And I hope that we don’t lose that as we
talk about trying to find a way to get to a solution.
I know the notion of suspending duties and taxes is important,
and I can support that. I think that helps us to find a way, again,
to lower the cost on the respective industries, but at the end of the
day, we are still grappling with this inversion of a supply demand
model that I don’t think we have ever seen before in this nation
in a capitalistic society. And unless we come to grips with that——
Chairman PHILLIPS. Mr. Mfume, your time is expired, unfortu-
nately. And we are going to try to do a second round, so if you can
stick with us.
Mr. MFUME. Well, I will try, Mr. Chair. But I just would leave
all of you with that thought about this model and how we fix it.
Chairman PHILLIPS. Thank you, sir.
And with that, I recognize Mr. Donalds from Florida for 5 min-
utes.
Mr. DONALDS. Thank you, Mr. Chairman. To the witnesses,
thanks for coming, obviously. Supply chain issues is really the core
issue, one of the core issues affecting our economy in such a disas-
trous way. Chuck, it is good seeing you. Chuck Fowke and I know
each other back from Florida. For those who don’t know, he actu-
ally did a lot of work with my mother-in-law for many, many years.
So I will make sure I tell Gaila that, you know, that you said hello
and were here testifying today.
I have heard a lot of different things in this hearing already, so
I am going to try to cut through some of the things, I think, that
are important and just ignore some of the things that are not. I
think it is crystal clear we have a staffing problem, an employee
problem in the United States. My last read on labor participation
rate was somewhere between 60 and 61 percent of Americans are
actually working Americans are at a labor force.
Our economy needs a labor participation rate of around 65 per-
cent to be kind of humming along. We simply are not there. Pretty
much would assume every witness we have could attest to that fact
that we have a severe labor shortage issue.
I do remember back in February when President Biden pushed
the American Rescue Plan, one of the key provisions for extending
federal unemployment benefits through September that he wanted
to do, the minority party said do not do that because our economy’s
ready to start humming along and if you, essentially, pay people—
extend their federal unemployment benefits, you will see labor
shortage. That is what has happened in the United States.
But specifically to supply chain, there was actually a really good
article was on zerohedge.com and the title of the article was essen-
tially—I will pull it up right now—‘‘Empty Christmas Stockings?
Don’t Blame COVID; Blame California.’’
And one of the things it talked about was that California has ac-
tually put through two very interesting pieces of legislation that
have crippled the trucking industry in California, specifically.
One is AB5, which was targeted at gig workers, to protect gig
workers by making them employees, but what has been—what has
actually happened is that in California, the ports were actually
SBD026 with DISTILLER
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00028 Fmt 6633 Sfmt 6633 F:\DOCS\45827.TXT DEBBIE
25
accessed by owner/operator truckers, but the owner/operator truck-
ers are essentially in that gig classification. So they can’t access the
ports in California anymore.
So now you have to go, essentially, with union truckers also deal-
ing with the union issues we have at the longshoremen as exists
right now. So no matter what business you are in, one of the rea-
sons you are having issues accessing a lot of product is because
there are less trucks, actually, accessing the ports in California.
The second California issue was, they passed emission laws that
they struck a deal with the EPA on where if your truck has an en-
gine that is more than 10 years old, that truck is not allowed to
be licensed and to be registered in the State of California, which
means that truck cannot access and be driven on the roads in Cali-
fornia, which means now you have supply companies who are tak-
ing the newer trucks to the ports, driving the newer trucks just to
the State lines of California and then off-loading the freight from
the new trucks to the old trucks and is driving the old trucks
through the United States.
I would ask the witnesses and anybody can jump in, Mr. O’Brien,
Mr. Fowke, anybody, does this make sense in terms of how you
would maintain the logistics of a supply chain as sensitive and as
robust as ours in the United States?
Mr. FOWKE. Congressman Donalds, thank you. And thank you
for acknowledging our long-time friendship. I think anything that
any legislation that disrupts the opportunity to transport materials
right now is bad legislation.
If they can divert those tankers over to Florida, maybe we can
help them there unload their cargo and move it, but anything that
disrupts the flow in the transportation materials right now is very
disrupted to this issue.
And the home building industry, we have had our eye on supply
chain issues for almost over a year now, just remind you of that.
Mr. DONALDS. Mr. O’Brien, if you are still with us, I mean, if
you care to comment, I would like to hear your opinion because you
actually bring a lot of valued points to this discussion. I would real-
ly be interested in your opinion.
Mr. O’BRIEN. Thank you, Representative Donalds. I would just
say that outside the current congestion really goes beyond any port
or any State. It is systemwide. It involves many different
chokepoints, not just from the ports, but from the supply of real es-
tate that is available to transload from rail yards to trucking.
On the issue of AB5, we talked to our carriers. They are con-
cerned about it. We don’t have—it is not a particular issue for us.
It doesn’t apply to our model as a value-added intermediary. But
overall, I would just encourage the Committee to think about the
supply chain as systematic and that it goes all the way from the
domestic links to the international links and from port all the way
to delivery.
And there is a lot of different modes versus any one port or State
that we need to work on.
Mr. DONALDS. All right. I am over time. Thank you so much,
gentlemen.
I yield back.
Chairman PHILLIPS. The gentleman yields back.
SBD026 with DISTILLER
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00029 Fmt 6633 Sfmt 6633 F:\DOCS\45827.TXT DEBBIE
26
And now I recognize the Chairwoman of the Subcommittee on
Economic Growth, Tax and Capital Access, the gentlelady from
Kansas, Ms. Davids, for 5 minutes.
Ms. DAVIDS. Thank you, Chairman. Well, first of all, I am glad
that we are holding this hearing today on such a critical issue that
is definitely impacting small businesses and their customers in
real-time.
Supply chain delays and shortages have been a concern since the
beginning of the COVID-19 pandemic when our stockpile of criti-
cally needed medical supplies and PPE was depleted and demand
was growing to protect frontline healthcare workers.
Amid those early shortages, I heard from businesses in Kansas
about the impacts of the supply chain breakdown on various indus-
tries. Their concerns led me to introduce the SUPPLIES Act in
April of last year to support small manufacturers that really
stepped up to produce some of those desperately needed medical
supplies and equipment.
And today, our small businesses are still faced with these ex-
tremely high shipping costs and delays that are setting them back.
And, frankly, this—we heard this earlier too. This has been an
issue since even before the pandemic and it demonstrates that we
have been dependent on a pretty precarious supply chain for far too
long.
And in today’s hearing, I do want to focus on the challenges that
shipping and freight industries are facing right now. You know, the
Kansas Third is an extremely busy intermodal shipping hub. Our
small businesses and the small businesses across the country rely
on the Kansas City Metro area to facilitate the transportation of
so many different products to their destinations.
And as the Vice Chair of the Transportation and Infrastructure
Committee, I have been working to alleviate congestion at ports of
trade and the issue of shipping container shortages, and I am glad
that we have freight expert here to help us understand the impact
on small businesses and how we can support them through these
shipping challenges, especially after they have suffered such dev-
astating impacts during the pandemic.
So Mr. O’Brien, I am really glad that you are able to join us
today and as a freight company that really focuses on small busi-
ness services, can you kind of speak to the unique challenges that
small businesses are facing with the current state of shipping?
Mr. O’BRIEN. Yes. Thank you, Representative Davids. So we
work with companies of all sizes and consistent with my testimony,
I would say that companies of all sizes are struggling. It is espe-
cially challenging for small businesses, but we are getting calls
every day from potentially the largest companies in the world that
are struggling and sometimes they are thousands of containers be-
hind.
So, like I said, it is not one port, it is not one State, or one point
of origin; it is just this very unique and unprecedented in my 30-
year career crunch from a supply chain standpoint, from a demand
and supply inversion. So we are in the foot steps of the small ship-
pers, sometimes quite literally on site.
We represent them. We represent them with the steam ships. We
do everything that we can. As you know in Kansas City, we have
SBD026 with DISTILLER
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00030 Fmt 6633 Sfmt 6633 F:\DOCS\45827.TXT DEBBIE
27
our freight quote by Robinson team they and they build online tools
that were built with and for small shippers to give them access to
LTL pricing at the rates and size and scale of a larger shipper.
So we focus on anything that we can do and right now within
this period, our people are working harder than ever on behalf of
customers of all sizes. We are on their footsteps as one of the larg-
est purchasers of transportation services around the world.
So it certainly has been extremely challenging, but we are doing
everything that we can for companies of all sizes today.
Ms. DAVIDS. Yeah. And so, you know, mentioning the working
with LTL and I think of us being able to move quickly and be able
to pivot, be able to really be agile, and I think we need good infra-
structure to be able to do that. As we work on this bipartisan infra-
structure package, I am curious if you can, you know, from your
perspective, what investments can we be making in infrastructure
that are going to result in that timely and efficient and effective
moving of all of those goods?
Mr. O’BRIEN. I think anything that helps move the flow of
goods. So expediting at our ports. The American Transportation Re-
search Institute is a good place to start. They published a list of
the largest supply chain chokepoints, and those are highways, not
ports. Those are most of our major Metro areas. We have a chal-
lenge with available drivers and congestion is not helping them at
all. It is making the job more challenging. It is delaying revenue
for them.
So I would want the focus to be broad across the supply chain
because the challenge really is broad. Across every mode, there are
chokepoints today.
Ms. DAVIDS. Yeah. Well, thank you for that and thank you,
again, for everybody participating today.
And I yield back.
Chairman PHILLIPS. The gentlelady yields back.
And now I recognize the gentleman from Wisconsin, Mr. Fitz-
gerald, for 5 minutes.
Mr. FITZGERALD. Thank you, Mr. Chairman. I just wanted to
take it a little bit different direction than just on the supply side.
Met with a number of developers and this is in southeastern Wis-
consin about a month ago and there seemed to be a level of frustra-
tion, and I know this is regional, but developers right now and the
relationships that they are trying to build with municipalities to
further, for the most part, subdivisions and the creation of subdivi-
sions, there seems to be another issue and that is kind of every-
thing that needs to happen to support that subdivision, whether it
is the underground or later on kind of revisiting that site and mak-
ing sure that it is up to snuff and up to code.
Mr. Fowke, maybe you can comment on this. I mean, you know,
it is hard to get a municipality to make this type of upfront invest-
ment not knowing necessarily if they are going to be able to recoup
this at a later date. And certainly I think what we are seeing is
not only the disruptions, but also just the labor issue and being
able to have enough carpenters or masons on the job site. I mean,
this is becoming far more complicated than it has ever been before
and I was wondering if you could comment on that upfront invest-
ment that municipalities have to make?
SBD026 with DISTILLER
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00031 Fmt 6633 Sfmt 6633 F:\DOCS\45827.TXT DEBBIE
28
Mr. FOWKE. Well, unfortunately, a lot of municipalities today
are against growth and the challenges with these areas being
against growth, it puts stress on the old housing stock for people
to have a place to live. The other thing is the regulations that are
heaped on our industry continue to increase. Right now the effect
of regulations on the construction of a home today add 30 percent
to the cost of the home. This is before the house ever starts. This
is average number throughout the country.
So unneeded regulations, delays in approvals, and then just cer-
tain areas that are against growth and they have moratoriums on
growth. And we need to do a better job of planning for water and
sewer and the infrastructure that we need to provide housing for
people because, again, you know, our supply of new houses, healthy
supply of new houses typically is about 6 months. We have about
a 2 month or less supply now. Own housing stocks is the same
way.
We resell houses. Typically, a 6-month inventory is a healthy in-
ventory. We are below 2 months now for that. So all this does is
increases the price and just prohibits the opportunity for people to
enjoy the American dream.
Mr. FITZGERALD. Yeah. Mr. Robinson, can you comment on
kind of this dance that goes on between municipalities and devel-
opers and often times what results in zero new development?
Mr. Robinson, could you comment on that?
Oh, Mr. O’Brien, I am sorry.
Mr. O’Brien.
Mr. O’BRIEN. Sorry. I wasn’t clear on the question. Could you
repeat that?
Mr. FITZGERALD. Yeah. I was talking about when development
is happening and municipalities are making the upfront invest-
ment and the underground and everything related to that project,
often times what they recoup on the back end is difficult for them
at this point. So they are leery or they are unwilling to make that
investment.
Mr. O’BRIEN. Yeah. That is not an area that our business is
very close to. I would say one trend from municipality standpoint
that we need to be careful on is the trend towards banning urban
parking. So I have mentioned the need for more truck drivers. The
long-term trend is, you know, more urban residence.
That is one thing that impedes and it is not talked about that
much, but a lot of cities are removing urban trucking parking spots
and that makes it more difficult to attract drivers that would have
to drive a longer distance to be able to get to their truck and does
not help the already existing capacity crunch.
Mr. FITZGERALD. Yeah. Thank you. I mean, my comment
would be in the developers in southeastern Wisconsin, I know it is
regional, but a lot of the issues, I think, have resulted in zero
growth in some of my counties. Literally, municipalities that have
not had one new home built over the last 3 years and I think it
is becoming not only alarming, but is a very complex issue.
So with that, I would yield back.
Thank you, Mr. Chair.
Chairman PHILLIPS. The gentleman yields back.
SBD026 with DISTILLER
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00032 Fmt 6633 Sfmt 6633 F:\DOCS\45827.TXT DEBBIE
29
And now I recognize the gentlelady from Georgia, Ms.
Bourdeaux, for 5 minutes.
Ms. BOURDEAUX. Thank you so much, Chairman Phillips, and
Ranking Member Van Duyne for holding today’s hearing and for al-
lowing me to waive on to discuss this critical issue. Supply chain
issues have become increasingly apparent since the on set of the
COVID-19 pandemic, particularly in recent months as our economy
continues to recover and demand surges.
In my district, Metcam Metal Fabricators had to temporarily
shut down production of certain items due to a shortage of tita-
nium dioxide, a component almost exclusively available from
China. This disruption then led Carrier to having to restrict its
manufacturing processes in its southeastern United States facility
and this shows how these shocks and disruptions in one portion of
the supply chain can trickle down and affect many, many other
components. These issues are not new, however.
In recent years as our economy has depended on just-in-time de-
livery models and increasingly global supply chains, we really
haven’t matched that change with sufficient government review
and support for supply chains of critical goods and services. This
effort requires a whole-of-government approach, one that really em-
phasizes collaboration between the government and the private sec-
tor to achieve our shared goal of resilient economy that can avoid
and withstand disruptions and shocks to the supply chain.
Of course, this is not just an economic issue; it is also a national
security issue and is about our national health as we saw during
the pandemic when we were very dependent on global supply
chains that were badly disrupted. This is why I introduced the
Supply Chain Health and Integrity For the Nation Act, the Supply
Chain Act with Representatives Kinzinger and Kelly 2 weeks ago.
The Supply Chain Act would create an office of supply chain re-
siliency and crisis response at the Department of Commerce which
would be responsible for coordinating this approach and collabo-
rating with the private sector and labor organizations. This office
would also be responsible for producing a quadrennial national
strategic plan for manufacturing and industrial innovation, which
will guide our nation’s efforts to secure critical supply chains.
This question is for Mr. O’Brien. And really ties back to that idea
of this just-in-time production strategies. We saw those really de-
veloped over the past couple decades. They have helped keep inven-
tories and costs low for businesses and customers, but clearly these
economic and business strategies are also really vulnerable to dis-
ruptions.
Can you talk a little about why this business model was adopted
and if you think this model is going to change after the disruptions
around COVID? What are going to be some of the changes you are
seeing out there or are we just trying to get back to business as
usual?
Mr. O’BRIEN. Thank you, Representative Bourdeaux. I would
like to start by addressing your comments about the public-private
cooperation and I think that is going to be key to a solution.
I was a part of the Minnesota business partnership that worked
with the State and city and the major employers in Minnesota at
the initial outbreak of COVID and we volunteered our time, as well
SBD026 with DISTILLER
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00033 Fmt 6633 Sfmt 6633 F:\DOCS\45827.TXT DEBBIE
30
as many corporate leaders to facilitate the flow of PPE into the
State of Minnesota and then we passed on what we learned to
other States.
So I think that is the way forward. In terms of investment in the
flow of goods, I would say, as you look about that whole supply
chain, keep in mind the customs process as that is completely in
government control. Anything we can do to modernize U.S. Cus-
toms processing and automate it which has been the direction that
we have had some success is great.
Lastly, on your question of just-in-time inventory, just-in-time in-
ventory has been a long-term trend which is to reduce costs and
keep safety stocks as low as possible in order to pass on those sav-
ings to consumers. So it has been a good trend. It is obviously in
an unprecedented time like this shown the weakness side of it in
ways that we haven’t noticed in the past and are probably unlikely
to in the future.
Obviously, companies right now are rethinking that strategy. I
don’t think right now there is enough available supply transpor-
tation or goods to create anything like a bullwhip effect through
this, but I do talk to several companies that are thinking about re-
evaluating, but I don’t think it is, you know—I don’t think we are
going to go back to a period of trying to build up safety stocks at
the level that would be necessary to prevent the challenges with
something to this scale, but I would see some adjustments.
But overall there is an expense to carrying costs to businesses
and ultimately to the consumer.
Ms. BOURDEAUX. Thank you. I think this is going to be an on-
going challenge of how we both support those supply chains. We
want to make sure we are efficient, working in a very efficient way,
but also how are we going to deal with disruptions.
And I don’t know that it is just going to be—things are going to
be able to go back entirely to normal. I think there will be other
unforeseen things on the horizon and we need to be agile and able
to really figure out how we adapt quickly to that.
This next question is for—oops. I think I am out of time. So I
will hold my next question and thank you so much for letting me
weigh in here.
And I yield back.
Chairman PHILLIPS. The gentlelady yields back.
And now I recognize my colleague from Minnesota, Mr. Stauber,
for 5 minutes.
Mr. STAUBER. Well, thank you, Mr. Chair, Ranking Member
Van Duyne for holding this very—very important that we look at
this issue and find ways to, you know, secure our supply chains.
And I first want to say that, you know, at the start of COVID,
there was—the nation wasn’t sure what was going to happen, but
I have to say the trucking industry and those related helped carry
the goods to the American people. Goods that we needed and obvi-
ously right now with some of the policies coming out of this admin-
istration, bear shelves, energy policies causing us all to pay more
for not only gasoline and other fuels, but even groceries.
I want to thank the witnesses, in particular, from C.H. Robinson,
Mr. O’Brien, and I know they are not only a national, but really
a world leader and to have an expert such as Mr. O’Brien here, I
SBD026 with DISTILLER
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00034 Fmt 6633 Sfmt 6633 F:\DOCS\45827.TXT DEBBIE
31
want to thank my colleague from Minnesota for bringing this ex-
pertise to this Committee. It is really important. And I am going
to get right to the point. We know that we have—we are paying
more, you know.
Mr. O’Brien, you mentioned that small businesses are going to
be hurt more just in fuel costs alone, can you tell us the devasta-
tion it is going to cause small businesses if they have to pay addi-
tional moneys to find different ways or pay more to bring that com-
modity to their small business?
Can you tell me what you have heard, how devastating it will be
to small businesses that don’t have the capital to pay those high
prices right now.
Mr. O’BRIEN. Thank you, Representative. I would add that fuel
is one of the things that goes into any shipper’s budget of any size.
Fuel obviously being very high certainly does not help. It is one of
the input costs. Transportation rates, both domestically, we have
talked about transportation rates globally being up, you know,
enormously.
Transportation rates are up domestically as well. In the spot
market, we have seen rates 40 to 50 percent increases over last
year. Contractual rates are up.
Mr. STAUBER. Mr. O’Brien, rather, what would be the input
rate right now for cost of fuel?
Mr. O’BRIEN. I am sorry. Could you clarify the question?
Mr. STAUBER. What is the input rate today for the cost of fuel?
Mr. O’BRIEN. Do you mean as a percentage of transportation?
Mr. STAUBER. Yes, percentage.
Mr. O’BRIEN. Roughly 40 percent.
Mr. STAUBER. Okay. With the increase of fuel prices, would it
be more than 40 with the fuel going up? Would that input in-
crease?
Mr. O’BRIEN. I am sorry. Could you clarify the question? It real-
ly depends on the length of haul of the goods. So——
Mr. STAUBER. If it is a 500-mile haul, for example, is the cost—
the input cost for fuel going to be more?
Mr. O’BRIEN. I don’t know exactly what the break point is, but
if you think about it being 40 percent, you could just do the math
from there. I would say there is some break point, but it is—it is
pretty—it is pretty parallel to the cost of line haul. The longer you
go, the more you are paying for fuel. So I would use 40 percent as
the right metric and then just multiply by the increasing rates of
fuel.
The system and the transportation has a pretty good way of deal-
ing with fuel. It is a surge charge tied to an average diesel price.
So the processing is there and the industry for years has dealt with
it going up and down, but today it is an added expense in an al-
ready constrained industry.
Mr. STAUBER. What I am hearing from the small businesses in
Minnesota’s eighth district, northeastern Minnesota, they can’t get
their supplies, they can’t get what the consumer needs, and in light
of the PPP that was extended to them, many of them are on the
verge of not making it because they can’t—they can’t get the prod-
ucts to market.
SBD026 with DISTILLER
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00035 Fmt 6633 Sfmt 6633 F:\DOCS\45827.TXT DEBBIE
32
And I think that one of the things that we must look at and we
must understand is that, as the experts in the transportation in-
dustry, we are looking for you for answers and help as we go for-
ward. And I think that what you have given out today in your tes-
timony is extremely helpful. So we could make good decisions to
help with this crisis.
And it is not going to happen overnight, but we have to have
good legislation that will move forward and allow us to get back
to where we were to get the goods to the consumers, including the
small businessmen and women across this nation.
I see I am over time, Mr. Chair. Thank you very much.
Chairman PHILLIPS. And with that, we are going to move to a
second round of questioning, anybody wants to participate in an-
other round. I ask you to join me.
With that, I will start with myself for 5 minutes. Mr. Loe, I re-
member years ago using the STEP program for our business to
help with trade shows and market our brands overseas. We talked
about how we need to be a country that fills more of these empty
containers and sends them overseas, and I really want to salute
you and your enterprise for being amongst that 1 percent of small
businesses in the U.S. that actually export their products inter-
nationally.
Would love for you to share with this body how the STEP pro-
gram has helped you and the elements that we should continue to
invest in and support and your overview of how we can be more
effective?
Mr. LOE. Thank you, Mr. Phillips, for the question. Really ap-
preciate that. Yeah. The STEP program has just been enormous for
us in being able to use the services. We use services in our mar-
keting strategy to access new customers. That is one of the biggest
things that this program has allowed us to do is to do trade shows,
be able to use trade offices located across the world.
U.S. Embassies that we use as well too to hold meetings and
really locate with market research from the different universities
that we have been teamed up with and partnered with, as well as
using their offices for boots on the ground type of approach to be
able to look for new customers of ours.
When we find new customers of ours, that is when we send large
containers overseas and we continually build that relationship with
those customers to then send more containers of equipment to
them to service, you know, their local market with our product.
That is done through different programs in the STEP program that
includes, you know, different trade shows.
We are able to use their—again, their trade offices to understand
who their end customer is. So not only the potential manufacturers
that we use, but also the end customers that would then use our
product that these trade offices help to build that business. It is a
great partnership that we are able to do with those manufacturers
to provide those services.
We don’t understand sometimes all the different, you know, fac-
tors involved with it and that is where the MEDC comes in to play
to help us with those trade offices to understand what we need to
do to go into market and to be very, very successful with that mar-
ket.
SBD026 with DISTILLER
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00036 Fmt 6633 Sfmt 6633 F:\DOCS\45827.TXT DEBBIE
33
We use educational in training with the STEP program as well
too. I wish I knew everything when it came to international trade.
I don’t and I rely on them to provide that training for us to make
that happen. The effectiveness of this program is really big for
small business like ourselves.
We appreciate all those services that they provide to us because
it helps us grow our business and in doing so helps them out as
well too.
The effectiveness I would say to continue with the STEP pro-
gram, to continue with the government services like Michigan Eco-
nomic Development Committee that continually helps us and fig-
ures out different ways. We have used internship programs with
them. We have used lots of different services that they continually
offer us to make our success in international vital to our business.
Chairman PHILLIPS. Love it. Hope you keep filling more con-
tainers.
Mr. LOE. We will. We will.
Chairman PHILLIPS. With that, Ms. Lantinen, like to return to
you for a moment. You referenced job training incentives as two po-
tential solutions to rectify your 100 employee deficiency at the mo-
ment. I hope you might speak about other potential solutions.
Is immigration reform perhaps one? Is childcare provision, espe-
cially in Minnesota where we are the third highest cost State in
the country? Are those areas in which we should spend some time
and look at improving policy?
Ms. LANTINEN. Thank you, Congressman Phillips. You know, of
that 100 million people that are not in the workforce, 10 percent
is an estimate for illegal immigrants. And we have turned away
many people with fake IDs to the point that our HR team has said,
if we accepted fake IDs, we would had the 100 people that you
need, Christine.
So I do think we need to look at that and look at people that
have been in our country and that have been contributing to our
society as another potential work pool to pull from that is out there
and wants to work.
As far as childcare goes, we are actually looking at putting a
childcare facility on site at our factory to help working moms and
to help with the cost of childcare and the quality of childcare. So
those are important things definitely.
Chairman PHILLIPS. Thank you very much. My time is expired.
Do any of my colleagues—Ms. Van Duyne? Anybody?
Mr. HAGEDORN. Chairman?
Chairman PHILLIPS. I recognize Mr. Hagedorn, my colleague
from Minnesota, for 5 minutes.
Mr. HAGEDORN. Thank you for doing this. I want to clean up
a few things. Talk about the trucking shortage and truckers. A lot
of the problems in the trucking industry are bad government poli-
cies or government policies that were well-intended on safety and
other issues, environment, that have led to big problems in the in-
dustry.
The hours of service over the years has limited truck drivers, cre-
ated a lot of inefficiencies driven up the cost of transportation. The
Tier 4 environmental standards that are imposed upon big trucks
are driving up the costs of those big trucks $20,000 or more.
SBD026 with DISTILLER
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00037 Fmt 6633 Sfmt 6633 F:\DOCS\45827.TXT DEBBIE
34
If somebody is trying to get in the industry, want to be an inde-
pendent truck driver, that means they got to spend another
$20,000 to go buy a truck. That is an impediment. That is not a
good thing. The environmental standards are also ripe for failure
on these trucks.
These sensors go off and at any time right now in our country
the trucking industry people in Minnesota tell me there are be-
tween a thousand and 10,000 trucks on the side of the road who
are waiting for sensors to be fixed because these things when they
go wrong, the trucks have to stop. It is $1,000 tow. That is also not
very good for the truck driver or the industry.
And before you know it, they can’t get the parts and they are
waiting for technicians. So we have a lot of trucks that are just out
of service all the time. Again, well-intentioned, but did we go too
far with Tier 4 requirements that make you go from here to here,
but it is way more expensive. It is something to look at, but that
is government. That is bad government in many instances.
Look at the supply chain issues. Nobody today has really men-
tioned China. Let’s bring our jobs back from China. We should be
doing what we can to have less manufacturing in China and more
manufacturing in the United States or countries that are neutral
actors with us that we can rely upon more freely. One of the things
that bothers me about the Democrats’ big reconciliation bill, mas-
sive transfer of dependency to China.
Just look at energy. They have something in there called the
Clean Electricity Plan. It is a remake of Obama’s Clean Power
Plan. You are going to decommission natural gas and coal-fired
power plants in the United States and try to supplement that with
intermittent energy in wind and solar. It is not feasible for one. It
is going to drive up cost and it is going to make it less reliable.
If you like what is going on in Germany and California where
they have rolling brownouts where the wind and solar weren’t cut-
ting it and so they are begging for natural gas power and they are
spending 50 percent more in California, other places. This is what
the Democrats want to do to you all across the country.
I think it is a bad idea, but even worse, when you rely on wind
and solar and electric vehicles, you are dependent upon China be-
cause they have all the rare Earth materials and minerals needed
to produce the lithium, the cobalt, all those things that go into
that.
I don’t know a patriotic American that thinks it is a good idea
for the United States to depend upon our electricity and our vehi-
cles to Communist China. I can’t figure that one out, but it is some-
thing that people have to start wrapping their hands around.
Lastly, Mr. Mfume and others talked about work for welfare.
Well, you kind of skewed that. When we talk about work for wel-
fare or technical trading requirements for people that collect wel-
fare in this country, we are talking about able-bodied people with-
out dependents. We are not talking about people taking care of
families, we are not talking about people that can’t go to work.
And I will just say it for the record, again. I worked on this issue
back in the 1980s with Congressman Stangler from Minnesota. We
carried the bill that was a precursor to what Gingrich and Clinton
and everybody did. It works every time. It is fair to the taxpayers.
SBD026 with DISTILLER
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00038 Fmt 6633 Sfmt 6633 F:\DOCS\45827.TXT DEBBIE
35
It is the right and compassionate thing to do for people who are
out of work and to try to encourage them to get private sector
work.
Helping people become self-sufficient and less dependent on gov-
ernment is absolutely should be our goal. And, you know, when the
folks on the other side say, oh, you are going to take them away
from their families. That is not what we are talking about. We are
talking about able-bodied folks who don’t have any dependents and
71 percent of them have no income, according to the latest statis-
tics.
So they are certainly capable of getting out there, particularly
when we have 11 million jobs available and everybody in southern
Minnesota and across this country every business is begging for
work.
With that, I will yield back.
Chairman PHILLIPS. The gentleman yields back.
And now I recognize the gentleman from Florida, Mr. Donalds,
for 5 minutes.
Mr. DONALDS. Thank you, Mr. Chairman. I associate myself
with the comments of my colleague from the great state of Min-
nesota.
Mr. Loe, I want to come to you. You said in your opening state-
ment that you are supportive of the bipartisan infrastructure plan.
Is that correct?
Mr. LOE. That is correct, Mr. Congressman.
Mr. DONALDS. Mr. Loe, do you know what percentage of that
actual bill actually goes towards infrastructure? Roads, bridges,
construction, construction materials, do you know what percentage
of that bill actually goes towards it?
Mr. LOE. In regards to the 3.5 trillion or the 1 trillion?
Mr. DONALDS. I am just dealing with the 1.2 trillion. That
other thing isn’t even infrastructure I don’t care what they say.
With respect to the $1.2 trillion bill, you know what percentage ac-
tually goes towards construction, actual construction costs?
Mr. LOE. I do not.
Mr. DONALDS. All right. So that is about anywhere between de-
pending on what you want to put into the bucket, anywhere be-
tween 130 billion to $200 billion of the 1.2 trillion. Still support it?
Next question—don’t answer that one.
My next question is, with respect to your business and shipping
costs—this is really supply chain that we are talking about—in
that bill there is without a doubt, there are going to be tax in-
creases on energy production in the United States. That is the life
blood of every business. Your colleagues that are on this witness
panel today to keep the lights on in this place all across the coun-
try. There are going to be tax increases on energy production.
Since we already know because it was said by Mr. O’Brien that
40 percent of the inputs into shipping is energy costs and that bill
is going to increase energy costs in the United States into a frame-
work that is already strained by extended costs in the shipping
area, is it something, in your opinion, that small business owners
should be supporting, which are tax increases into the energy
framework of our economy that will also increase the costs on
SBD026 with DISTILLER
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00039 Fmt 6633 Sfmt 6633 F:\DOCS\45827.TXT DEBBIE
36
freight and shipping, which are already heightened in the United
States?
Is that something, in your opinion, small business owners would
support?
Mr. LOE. Thank you for your question, Mr. Donalds. That is a
great question and I would be happy to get back to you on the im-
plications of that. As related to infrastructure with our business
and our product itself, we build retaining walls and in the infra-
structure bill, we are looking at building roads, building bridges,
and retaining walls are huge part of that as infrastructure. That
is where the support comes from from any infrastructure support
from our business——
Mr. DONALDS. Mr. Loe, I got a follow-up question for you be-
cause I only got 2 minutes and 25 seconds.
Mr. LOE. Sure.
Mr. DONALDS. Here is my follow-up question to that. I totally
understand you as a business owner wanting to make sure you
have all the necessary revenue and jobs lined up for the continu-
ation of your business model, the continuation for your employees,
the continuation for your owners, shareholders, however, your com-
pany is formed.
Is it appropriate—I am going to use this phrase, is it fair and
is it equitable for your enterprise to be able to get additional rev-
enue into your business associated with this bill, meanwhile other
businesses in our country who would never get a construction or
infrastructure contract, the costs on them associated with freight
will precipitously increase because the bill you support will in-
crease energy costs in the United States which will also increase
freight and delivery costs in the United States?
Do you believe it is fair and equitable for all small business own-
ers to basically be hamstrung by the bipartisan infrastructure bill,
even though, in your specific enterprise you might seek to benefit
from the infrastructure bill? Is it fair and equitable?
Mr. LOE. Thank you for your question and I am not qualified to
answer that question.
Mr. DONALDS. Mr. Loe, hold on a second because I have missed
an introduction page over here. Stay with me, Mr. Loe.
Mr. Loe, for the record, because I don’t have the sheet in front
of me, what is your title with your company? What is your posi-
tion?
Mr. LOE. Director of the customer engagement team.
Mr. DONALDS. So you are director of customer engagement?
Mr. LOE. That is correct.
Mr. DONALDS. So you have not had any conversations with the
owners of your company?
Mr. LOE. I have had lots of conversations with the owner of my
company, yeah.
Mr. DONALDS. They support the infrastructure bill?
Mr. LOE. We support infrastructure bill to go after roads and
bridges construction to continually gain the revenue need for our
120 independently owned and operated businesses so that they can
continue to provide great retaining walls for bridges, for roads, for
municipalities, and for government DOTs——
SBD026 with DISTILLER
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00040 Fmt 6633 Sfmt 6633 F:\DOCS\45827.TXT DEBBIE
37
Mr. DONALDS. Mr. Loe, I have a question for you—my final
question for you.
Mr. LOE. Yes, sir.
Mr. DONALDS. Do you want to see your electricity prices in-
crease for you, not your company, just for you, you and your home?
Mr. LOE. I do not want to see my prices increase.
Mr. DONALDS. Mr. Loe, why would you support a bill that is
going to increase the cost of electricity just for your home?
Don’t answer that question, Mr. Loe. Here is what I will leave
the American people with, Mr. Chairman. Americans like the word
‘‘infrastructure.’’ I completely understand why, but that bill is far
more than infrastructure. It will unilaterally remake our energy
matrix; it will increase the cost on all Americans whether you get
a government contract or not.
Chairman PHILLIPS. The gentleman’s time has expired.
Mr. DONALDS. Thank you, Mr. Chairman.
Chairman PHILLIPS. Not seeing any other interests in ques-
tioning, I will make a closing statement.
My colleague from Florida asked about the infrastructure bill.
Let me just read the components of it since the question was asked.
$110 billion for roads and bridges, $55 billion for water infrastruc-
ture, $66 billion for railroads, $65 billion for broadband, $17 billion
for ports, $17 billion for ports. Our ports in the United States of
America are significantly underfunded and pale in comparison to
ports around the world, $25 billion for airports, $65 billion for the
electric grid, including another $50 billion to make it more resil-
ient. It is a bill that generated 19 Republican senators support in-
cluding the Minority Leader Mr. McConnell. I leave the data and
the facts as they are.
I want to thank all our witnesses for being with us today. This
is tough stuff. We are here to support small businesses. Condemna-
tion doesn’t go too far, conversation does, and I want to thank my
colleagues on both sides of the aisle who share my interest in iden-
tifying the problems, but, most importantly, finding solutions. The
pandemic has up ended a lot in our lives. It has exposed weak-
nesses, including for small businesses, including particularly our
supply chain. It is a complex system our supply chain. There is no
magic solution. I was hoping we might come here today and find
that magic wand that we could just solve this problem.
The truth is I didn’t hear one actionable solution that we could
implement today to solve the problem. We have to make invest-
ments. Long-term, strategic, thoughtful, and intentional by both
Democrats and Republicans. That is the spirit of this Committee.
That is what I hope we do. It is going to take strong leadership.
We can do a few things. The Biden administration, of course, this
week announced that they would extend operating hours for our
major ports to 24 hours, something that competitors around the
world at their ports are already doing. Those are small steps that
we can take. I salute the administration for doing so.
With that, we will close this meeting and I would ask for unani-
mous consent that Members have 5 legislative days to submit
statements and supporting materials for the record.
Without objection, so ordered.
SBD026 with DISTILLER
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00041 Fmt 6633 Sfmt 6633 F:\DOCS\45827.TXT DEBBIE
38
And if there is no further business to come before the Committee,
we are now adjourned.
Thank you, everybody.
[Whereupon, at 11:56 a.m., the Subcommittee was adjourned.]
SBD026 with DISTILLER
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00042 Fmt 6633 Sfmt 6633 F:\DOCS\45827.TXT DEBBIE
39
APPENDIX
SBD026 with DISTILLER Insert offset folio 39 here 45827.001
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00043 Fmt 6602 Sfmt 6602 F:\DOCS\45827.TXT DEBBIE
40
SBD026 with DISTILLER Insert offset folio 40 here 45827.002
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00044 Fmt 6602 Sfmt 6602 F:\DOCS\45827.TXT DEBBIE
41
SBD026 with DISTILLER Insert offset folio 41 here 45827.003
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00045 Fmt 6602 Sfmt 6602 F:\DOCS\45827.TXT DEBBIE
42
SBD026 with DISTILLER Insert offset folio 42 here 45827.004
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00046 Fmt 6602 Sfmt 6602 F:\DOCS\45827.TXT DEBBIE
43
SBD026 with DISTILLER Insert offset folio 43 here 45827.005
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00047 Fmt 6602 Sfmt 6602 F:\DOCS\45827.TXT DEBBIE
44
SBD026 with DISTILLER Insert offset folio 44 here 45827.006
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00048 Fmt 6602 Sfmt 6602 F:\DOCS\45827.TXT DEBBIE
45
SBD026 with DISTILLER Insert offset folio 45 here 45827.007
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00049 Fmt 6602 Sfmt 6602 F:\DOCS\45827.TXT DEBBIE
46
SBD026 with DISTILLER Insert offset folio 46 here 45827.008
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00050 Fmt 6602 Sfmt 6602 F:\DOCS\45827.TXT DEBBIE
47
SBD026 with DISTILLER Insert offset folio 47 here 45827.009
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00051 Fmt 6602 Sfmt 6602 F:\DOCS\45827.TXT DEBBIE
48
SBD026 with DISTILLER Insert offset folio 48 here 45827.010
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00052 Fmt 6602 Sfmt 6602 F:\DOCS\45827.TXT DEBBIE
49
SBD026 with DISTILLER Insert offset folio 49 here 45827.011
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00053 Fmt 6602 Sfmt 6602 F:\DOCS\45827.TXT DEBBIE
50
SBD026 with DISTILLER Insert offset folio 50 here 45827.012
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00054 Fmt 6602 Sfmt 6602 F:\DOCS\45827.TXT DEBBIE
51
SBD026 with DISTILLER Insert offset folio 51 here 45827.013
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00055 Fmt 6602 Sfmt 6602 F:\DOCS\45827.TXT DEBBIE
52
SBD026 with DISTILLER Insert offset folio 52 here 45827.014
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00056 Fmt 6602 Sfmt 6602 F:\DOCS\45827.TXT DEBBIE
53
SBD026 with DISTILLER Insert offset folio 53 here 45827.015
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00057 Fmt 6602 Sfmt 6602 F:\DOCS\45827.TXT DEBBIE
54
SBD026 with DISTILLER Insert offset folio 54 here 45827.016
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00058 Fmt 6602 Sfmt 6602 F:\DOCS\45827.TXT DEBBIE
55
SBD026 with DISTILLER Insert offset folio 55 here 45827.017
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00059 Fmt 6602 Sfmt 6602 F:\DOCS\45827.TXT DEBBIE
56
SBD026 with DISTILLER Insert offset folio 56 here 45827.018
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00060 Fmt 6602 Sfmt 6602 F:\DOCS\45827.TXT DEBBIE
57
SBD026 with DISTILLER Insert offset folio 57 here 45827.019
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00061 Fmt 6602 Sfmt 6602 F:\DOCS\45827.TXT DEBBIE
58
SBD026 with DISTILLER Insert offset folio 58 here 45827.020
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00062 Fmt 6602 Sfmt 6602 F:\DOCS\45827.TXT DEBBIE
59
SBD026 with DISTILLER Insert offset folio 59 here 45827.021
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00063 Fmt 6602 Sfmt 6602 F:\DOCS\45827.TXT DEBBIE
60
SBD026 with DISTILLER Insert offset folio 60 here 45827.022
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00064 Fmt 6602 Sfmt 6602 F:\DOCS\45827.TXT DEBBIE
61
SBD026 with DISTILLER Insert offset folio 61 here 45827.023
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00065 Fmt 6602 Sfmt 6602 F:\DOCS\45827.TXT DEBBIE
62
SBD026 with DISTILLER Insert offset folio 62 here 45827.024
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00066 Fmt 6602 Sfmt 6602 F:\DOCS\45827.TXT DEBBIE
63
SBD026 with DISTILLER Insert offset folio 63 here 45827.025
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00067 Fmt 6602 Sfmt 6602 F:\DOCS\45827.TXT DEBBIE
64
SBD026 with DISTILLER Insert offset folio 64 here 45827.026
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00068 Fmt 6602 Sfmt 6602 F:\DOCS\45827.TXT DEBBIE
65
Æ
SBD026 with DISTILLER Insert offset folio 65 here 45827.027
VerDate Mar 15 2010 15:00 Feb 09, 2022 Jkt 000000 PO 00000 Frm 00069 Fmt 6602 Sfmt 6011 F:\DOCS\45827.TXT DEBBIE
File and source
- File
- CHRG-117hhrg45827.pdf
- Size
- 13,261,399 bytes
- SHA-256
- 0ce8e38c863e7d63d353b64bec9f5bfd72fa5afe9f929f76634da8e9440f480a
- Our copy
- CHRG-117hhrg45827.pdf
- Original
- www.govinfo.gov