January 10, 2017

For Elaine Chao, the easy part begins and ends tomorrow

Nominee for DOT secretary seen sailing through confirmation, after which the hard work starts.

By Mark B. Solomon

Shortly after 10 a.m. tomorrow, Elaine L. Chao will appear before the Senate Commerce Committee and, barring unforeseen developments, will breeze through a confirmation hearing on her way to becoming the 18th secretary of transportation in the agency's 50-year history.

Those will likely be the least complicated moments of the 63-year-old Chao's tenure. Ahead of her lies a multitude of challenges. Chao will serve as the Trump administration's point person for a proposed infrastructure improvement initiative pegged at between $550 billion and $1 trillion, though at this point no one knows what it will entail or how it will be funded. While Congress controls the process, Chao's decades of public policy experience, which includes five years at DOT and the Federal Maritime Commission (FMC), and eight more as labor secretary in the George W. Bush administration, as well as her deep political connections—she is married to Senate Majority Leader Mitch McConnell (R-Ky.)—could put her front and center of what will likely be a high-profile debate.

Beyond her role in helping shape infrastructure policy, Chao is tasked with balancing the commercial demands of a rapidly changing mobility landscape and the department's top priority of ensuring public safety. The DOT's new world includes autonomous autos and trucks as well as commercial drones, areas that will only grow in relevance during Chao's tenure and will likely require different regulatory approaches. She will be dealing with ever-more crowded roadways; the Bureau of Transportation Statistics and the Federal Highway Administration, both DOT units, forecast today that truck ton-miles—one ton carried one mile—will rise by nearly 50 percent by 2045. She will be sought after by intermodal freight interests anxious to gain a larger share of the infrastructure pie with the phrase "freight can't wait." Chao is also likely to face pressure from motor carrier interests, emboldened by President-elect Trump's broad pledge to reverse Obama administration edicts viewed as anti-business, to rescind some of the Federal Motor Carrier Safety Administration's (FMCSA) regulations that truckers have complained are too costly and burdensome, and not justified by the potential safety benefits.

The only two regulations seen as being off the table are the mandate that each truck built after 2000 be equipped with an electronic logging device (ELD) by the end of the year, and the creation of a drug and alcohol information clearinghouse to let employers know whether a driver had a history of substance abuse at the time they were hired. Both are believed to have sound safety principles behind them, and, in the case of the ELD mandate, have been upheld by a federal appeals court, though the Owner-Operator Independent Drivers Association (OOIDA), which represents thousands of owner-operators and small fleets, has appealed the ruling.

James H. Burnley IV, who as deputy transportation secretary in 1986 helped launch Chao's transport career by recommending her as deputy maritime administrator, said Chao will take a rational and analytical approach to addressing economic regulation, and she will not let it conflict with her primary mission of maintaining safe roads, skies, waterways, railroads, and pipelines, all of which fall under DOT's purview. Though Chao will not layer the trucking industry with additional regulations, she won't put its economic interests above her overarching safety mandate, said Burnley, who served as DOT secretary in the last two years of the Reagan administration and has practiced law in Washington ever since.

Burnley, who has known Chao since 1983, was effusive in his praise. "She is one of the best qualified people, if not the best qualified person, to head DOT at this point in time," he said in a phone interview.

The American Trucking Associations (ATA) and OOIDA, the nation's two principal trucking groups, either declined comment or were not available to comment. The groups issued statements of congratulations when Chao was nominated in late November.

A balanced approach?

Cost-benefit analysis will be the order of the day at a Chao DOT, according to Marc Scribner, a senior fellow specializing in transport issues at the Competitive Enterprise Institute, a free-enterprise think tank with a jaundiced view toward regulation. "There will be a general skepticism of regulating first and asking questions later," said Scribner, a reference to what he said was the modus operandi of the Obama DOT. Ray LaHood and Anthony Foxx, the transport secretaries during President Barack Obama's two terms, "didn't really care about the costs" of regulations even if there were legitimate questions about whether the policies would result in safety improvements, Scribner said. That mindset will change under Chao, he predicted.

A tip-off to Chao's attitude toward trucking regulation may come with her choice to head the FMCSA, which over the past eight years has often been at loggerheads with truckers over alleged administrative overreach. The most recent administrator, T.F. Scott Darling III, has been relatively non-controversial. However, his predecessor, Anne S. Ferro, repeatedly incurred the wrath of an industry that accused her of ramming unfunded mandates with dubious safety benefits down its throat. A collective outcry of motor carrier interests is believed to have contributed to Ferro's departure from the agency in July 2014.

C. Randal Mullett, who was the long-time Washington lobbyist for the former Con-way Inc. trucking and logistics company, and now heads his own lobbying firm, said he's been told Chao is "actively involved" in selecting her leadership team, which would include the heads of sub-agencies like FMCSA. Mullett expects Chao to immerse herself in truck regulation with an eye toward better understanding the natural tension that exists between safety and economic imperatives. "Every administration is different, but based on the signals coming out of Trump Tower so far ... this administration will be very focused on such details, particularly in such a vital economic sector where good blue-collar jobs are involved," he said.

Chao's supporters point to her transport regulatory experience, which besides her stint at the maritime administration included one year as FMC chair and two years as deputy transport secretary in the George H.W. Bush administration. However, Kathryn B. Thomson, who was DOT general counsel under Secretaries LaHood and Foxx and is now a Washington-based attorney, said the significance of Chao's transport experience might be overstated. Thompson noted that Chao has been away from day-to-day transport policymaking since 1991, and in the years to follow did not keep her hand in the industry. Thomson, who never worked for or with Chao, said she has conducted extensive research on her work at DOT, the FMC, and the labor department since her nomination.

Throughout her stints in government, Chao has been supremely focused on reducing regulatory burdens and improving organizational behavior, Thomson's analysis found. Chao's style was to give directives to her staff and then expect those directives to be executed without much hands-on management. She excelled at completing what Thomson called one-off projects, and did not manage by consensus. By contrast, Secretary LaHood preferred to follow a big-tent approach where he sought views from multiple stakeholders before moving forward, Thomson said. It remains to be seen whether Chao's style will mesh with the work of an agency that takes a strategic, long-term view of the industry it governs.

"She is capable of doing it," said Thomson, referring to Chao's ability to re-align her management approach. "But she doesn't have a record of doing it."

About the Author

Mark B. Solomon
Executive Editor - News
Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.

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