Latest News
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US consolidates USDOT IT systems and moves FAA staff to USDOT headquarters
According to a memo obtained by the, the U.S. Transportation Department announced on Tuesday that it would move Federal Aviation Administration Headquarters staff out of their current Washington building and consolidate other agency systems and IT. The FAA Headquarters staff will move into the building that houses the U.S. Transportation Department's headquarters in Washington. The Department also announced that it would begin retiring legacy systems, while embracing new technologies, as it strives to "streamline processes, consolidate administration functions, and modernize infrastructure in order to better serve American citizens." The FAA or USDOT didn't immediately respond to questions about how many employees might be affected. The Trump administration is consolidating office space and reducing the size of federal employees. Transportation Secretary Sean Duffy informed employees that the initiative will be named 1DoT in order to "enhance Department of Transportation efficiency, accountability and operational excellence." USDOT informed Congress last month that it will lose just over 4,100 workers, falling from 57,000 employees to 52,862. The FAA, on the other hand, will shed 2,137 employees and fall from 46,250 down to 44,208. Duffy said last month that he was unsure if the Department would be conducting layoffs. Duffy added that the department will rehire in some areas, if necessary. "We're happy with where we are right now but will continue to evaluate where we stand in terms of our staffing requirements." (Reporting and editing by Stephen Coates; David Shepardson)
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US cancels another $175 Million in California High-Speed Rail Projects
After canceling $4 billion of federal grants in July for California's ambitious, but long-delayed, high-speed railway project, the U.S. Transportation Department announced on Tuesday that it will cancel $175 million of funding for four projects. The Trump administration announced Tuesday that it would withdraw funding from grade separations, overcrossings, design work, and the construction of a high-speed train station in Madera. California sued in July to contest the withdrawal of funds, calling it illegal. The USDOT has threatened to revoke $33 million of safety funding to California after it claimed that the state was not following federal regulations requiring truckers to be able speak English. The funding cuts represent another obstacle to the 16-year-old effort to connect Los Angeles and San Francisco with a train trip lasting three hours, a project which would provide the fastest passenger rail service available in the United States. The California High-Speed Rail Authority declined to comment immediately, but Newsom stated in July that the termination of grants was motivated by "petty political retribution" and President Trump's personal animus towards California and the High-Speed Rail Project, not facts on the ground. California voters approved the first $10 billion bond in 2008. Since then, more than 50 major structures have been built, including overpasses under-crossings, viaducts and bridges. The cancellation of funding marked the latest confrontation between a Republican president and a Democratic Governor widely considered as a top contender for the Democratic Party's nomination to the White House in 2028. Both men disagreed on a range of issues, from the transgender athlete and electric cars to the use National Guard troops at Los Angeles protests or even egg prices. San Francisco to Los Angeles was originally supposed to be finished by 2020 at a cost of $33 billion. The projected cost of the project has risen from $89 billion to a staggering $128 billion. Service is now expected to begin in 2033. The state challenged a previous decision by Trump to revoke federal grants worth $929 million during his first term, in 2019. This led to a settlement under Democratic President Joe Biden in June 2021, reversing the amount. (Reporting and editing by Leslie Adler, Stephen Coates, and David Shepardson)
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Canadian Pacific joins Buffett to reject railroad consolidation and narrow merger prospects
Two major rail operators pulled out of the merger race that has gripped industry in the last month. This has reshaped the competitive landscape, and raised the stakes on the proposed $85 billion union between Union Pacific and Norfolk Southern. Canadian Pacific Kansas City, along with Warren Buffett's BNSF Railway BNSF Railway, publicly rejected any consolidation of the rail industry in the near future on Tuesday. This move reduces the likelihood that a $85 billion merger proposed last month by top U.S. railroad operator Union Pacific with Norfolk will lead to further corporate marriages. The merger will create the first east-west U.S. rail operator and reshape the movement of goods across the nation, from grains to automobiles. The merger sparked concerns over market concentration, and heated speculation that rivals might need to combine forces in order to stay competitive. REGIONAL DUOPOLY In recent decades the U.S. railroad industry has undergone significant mergers, going from dozens to just six major class 1 railroads. Four major U.S. carriers dominate the U.S. rail freight industry - two are located in the west, and two are in the east. This means that shippers only have two options when it comes to the origin point. Union Pacific, a major railroad company in the West, has proposed joining Norfolk, a railroad with ties to the East. Initially, it was speculated that the two other U.S. railroad operators – BNSF Railway (in the west) and CSX (in the east) – could merge in order to remain competitive against a giant coast-to-coast. The game has changed dramatically in recent days. BNSF, backed by Buffett, dropped out first. In the United States, two large Canadian railroads also operate. Canadian Pacific would be the only company with a trinational network that could merge with CSX. The announcement on Tuesday left CSX with no viable partner to merge large. RISE IN REGULATORY RISE Union Pacific's plan to purchase Norfolk and expand coast-to-coast faces increased regulatory risks. If this were the only transaction being reviewed by the U.S. Surface Transportation Board regulators will be more concerned if this is the only deal under review by the U.S. Last month, expectations were very different. Board officials were preparing to review megamerger proposals when Union Pacific and Norfolk Southern announced they were in discussions last month. It is anticipated that the review will take between 17 and 22 months. The Canadian Pacific Canadian Pacific issued a statement in which it said that additional consolidation was not necessary. It also warned against a merger across the continent, saying this could "trigger a permanent restructuring" and "an unnecessary surge of rail mergers." In a statement, CEO Keith Creel stated that "any major rail merger presents unique and unprecedented risk to customers and rail employees as well as the wider supply chain." Berkshire Hathaway confirmed that Buffett and Berkshire Hathaway vice chairman Greg Abel had met privately on August 3 with CSX CEO Joseph Hinrichs, but they made it clear they weren't pursuing a merge, Berkshire said in an email following a CNBC article. The two companies instead announced a new coast-tocoast intermodal service, signaling their preference for operational co-operation over consolidation. CEO Creel stated that "many of the benefits claimed in support of transcontinental fusions can be obtained through new and expanded industrial partnerships." He said that Canadian Pacific continues to pursue opportunities such as the recently announced collaboration between CSX and the Southeast Mexico Express, which links the U.S. Southeast with Mexico. Canadian Pacific shares the same stance as BNSF which, on Monday, also ruled out participation in a merger, citing similar concerns over industry disruption and regulatory uncertainties. Union Pacific is a dominant force in the western two thirds of the U.S., with Norfolk's 31,400-km (19,500-mile) network which primarily spans the eastern states. Norfolk said Union Pacific will pay a $2.5 billion termination fee in cash if the contract is terminated under certain circumstances. CSX announced on Tuesday that it is continuing to investigate additional options for improving transcontinental service. The company stated that the board and management of CSX are committed to exploring all possible opportunities to increase shareholder value. This is illustrated by the recent intermodal service contract with BNSF. (Reporting and editing by Dawn Kopecki, Richard Chang and Sabrina Valle from New York)
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US waives sanctions against Serbian NIS Oil Company owned by Russians
A Serbian official, who did not want to be identified, said that the United States had for the sixth consecutive time delayed sanctions against the Russian-owned Serbian oil company NIS. NIS operates the sole oil refinery of the Balkan nation. The official stated without further explanation that the waiver would be valid for a month. The Office of Foreign Assets Control of the U.S. Treasury placed initial sanctions on Russia's petroleum sector on 10 January, and gave Gazprom a 45-day deadline to sell its NIS holdings. Requests for comment from the U.S. Treasury Department were not immediately responded to. NIS, of which Gazprom owns 44.9%, Gazprom 11.3%, and the Serbian Government 29.9%, operates Serbia's only refinery in Pancevo just outside Belgrade. Gazprom Neft, in an effort to avoid sanctions, transferred to Gazprom a stake in NIS of approximately 5.15% on the 26th February. The Pancevo plant has an annual production capacity of 4.8 millions tons, which covers the bulk of the Balkan countries' needs. Sanctions could threaten its crude supply via Croatia's Janaf. (Reporting and editing by Edward McAllister, Mark Porter and Aleksandar Vasovic)
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Exports for August revised up, despite a decrease in the number of uranium dilutions
Calculations and traders' statements show that the differential between Brent and Urals crude eased on Tuesday due to lower prices in India and firmer freight rates to Asia, as well as lower prices of the grade. The export plan for Russia’s western ports was also revised upwards. Three people with knowledge of the situation said that Russia increased its crude oil export plans for Priomorsk and Ust-Luga ports in August by 200,000 barrels a day from the original schedule, after Ukrainian drone strikes disrupted refinery operation and released more crude to be shipped. Due to the ongoing strikes and changing repair schedules, delays and volume revisions may be expected, they stated. PLATTS WINDOW On Tuesday, there were no bids or offers made on Urals, Azeri BTC Blend or CPC blend in the Platts Window. Interfax reported that the Russian energy ministry is working with oil companies to increase reserve capacity for refining. Mark Porter (Reporting and Editing)
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Boeing and the US FAA will conduct scenario-based planning before lifting the 737 MAX production limit
The Federal Aviation Administration's head said Tuesday that the agency will conduct tabletop exercises with Boeing to plan scenarios before lifting the cap of 38 planes per month on the 737 MAX production. Officials said that the exercises would review any potential problems Boeing could face as it increases production. They also aim to ensure that Boeing maintains its progress in quality. On Tuesday, FAA Administrator Bryan Bedford said that they still hadn't asked for an increase in the rate and we had not agreed to anything. We agreed that it was a good idea to begin the process of bringing up a conversation about a possible rate increase. Bedford said he hopes that these exercises, which are currently being developed, will be completed by the end September. Bedford added that if the FAA wants to increase production, they will have a road map on how to evaluate it. The FAA implemented the production cap after an Alaska Airlines 737 MAX 9 that was missing four bolts in mid-air during a mid-air emergency on January 20, 2024. Since then, FAA has increased its in-person supervision of Boeing production. Boeing declined to comment immediately. In May, CEO Kelly Ortberg stated that the planemaker was "pretty sure" it could increase production to 42 737 MAX jets per month. Bedford met with Ortberg and was briefed on Boeing's quality and safety initiatives, as well as the supply chain's stability, on August 15. The FAA also gave him a tour of the production line. In May, the FAA extended by three years the program that allows Boeing, on behalf of the agency, to perform certain tasks, such as inspections. Bedford praised Boeing's efforts to improve quality and implement changes, but acknowledged that there were still problems with traveling work. This is when jobs are completed later than planned. Bedford said that "in general, there are good news and cautious optimism, but still, work needs to be done."
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After a long legal dispute, Ryanair and Booking.com have reached a deal on tickets
The companies announced on Tuesday that they had reached a settlement with Booking Holdings, allowing their Booking.com and KAYAK sites to resell airline tickets. This agreement ends a long-running legal dispute. In recent years, Ryanair has taken legal action against third-party platforms such as Booking that resell the airline's tickets without its consent. The airline has accused the platforms of charging additional fees and making it hard for them to reach passengers. It has also been signing agreements since the beginning of the year with platforms such as Kiwi.com and Expedia to allow the resale tickets. In a joint statement, Ryanair and Booking stated that the deal would allow customers to receive flight updates and "full transparency" directly. In addition, the agreement covers Booking's Priceline website and Agoda. Ryanair announced that the partnership ends all litigation. Both parties were seeking a U.S. Court ruling on the legality for Booking websites to scrape Ryanair's website. Ryanair brought the case in 2020 but it has been appealed several times since then. In December 2023, a number of online travel agencies suddenly stopped selling Ryanair tickets due to legal and regulatory pressure. The airline said that the problem has been largely resolved. Conor Humphries, Helen Popper, and Barbara Lewis edited the article.
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US truck manufacturers look for protection as Trump's tariffs increase costs
Tariffs imposed by the Trump administration have increased manufacturing costs in the U.S. trucking industry worth $50 billion. This has led companies to source more components from Mexico, to take advantage of concessions made under the USMCA. Section 232 (Trade Expansion Act) imposes 50% tariffs on steel, aluminum, and copper derivatives imported by U.S. truck makers. Manufacturers like Bellevue-based Paccar face tariffs for every non-USMCA compliant part that they import. Daimler Truck, Traton and other rivals that manufacture in Mexico can gain an advantage over those who manufacture in the U.S. USMCA allows for duty-free trade between the U.S. and Mexico, Canada, and Mexico, as long as certain regional sourcing requirements are met. The pact requires that at least 64% (of the value of a heavy-duty truck) must be sourced in North America. This can include parts such as engines and axles or raw materials like steel, or assembly labor. This threshold will increase to 70% by 2027. Volvo, a Swedish company, and its subsidiary Mack Trucks, based in Pennsylvania and Virginia, produce their cars for the U.S. domestic market at their respective plants, Dublin and Macungie. A spokesperson for Volvo North American said that "trucks built in America are actually at a disadvantage today when compared with trucks built in Mexico." In April, the company increased its planned investment in Mexico by $300 million up to $1 billion to support its U.S. operation. Bernstein, a brokerage firm, said that tariffs on imported parts put U.S.-built trucks at a cost premium of 3% compared to USMCA compliant models manufactured in Mexico. Chad Dillard is a senior analyst at Bernstein. He said that companies with a greater manufacturing footprint in the U.S. compared to Mexico face a cost disadvantage. This is the exact opposite of what Trump wants. ACT Research predicted that production would drop 11% annually in 2026, to 226,600 vehicles. Economic headwinds as well as lower carrier profitability had hit the industry by 2025. Paccar, a company that sells trucks under Kenworth and Peterbilt, estimates tariff costs of $75 million for the third quarter. The company reported that its brands would hold a market share of 30,4% in the first half 2025. Daimler had a gross margin of 21,96% in the first quarter, compared to Paccar's 18,69%. Paccar declined comment on this article. Preston Feight, CEO of Paccar, said that in a recent earnings conference call the company is working with suppliers to increase USMCA certified parts imports. This will reduce long-term tariff exposure. According to ACT Research, tariffs can add between 2% and 4% to the cost per unit. Daimler's Mexican-built Freightliner Cascadia costs about $165,000, compared to roughly $195,000 of Paccar's Kenworth T680. The cost of a truck is largely determined by the raw materials, finished components and castings. Traton of Munich, which operates International Motors, formerly Navistar, for the North American Market, said that the USMCA allows it to qualify for duty-free entry to the U.S. The Volkswagen-owned company stated in a press release that "this can offer a cost advantage over U.S. manufacturing in cases where U.S. factories rely on imported components, steel or aluminum or those subject to Section 232 tariffs or other additional duties." Daimler Truck's spokesperson said the company has two USMCA-compliant factories in Mexico that produce a variety of models, including the Freightliner Class 8 Cascadia truck and the medium duty Freightliner truck M2. According to Mordor Intelligence, the U.S. heavy duty truck market is expected to grow from $51.56 billion to $71.81 billion in 2030. In April, the U.S. Commerce Department began an investigation under Section 232 to determine whether imports of heavy-duty trucks, and their parts, threaten national security. Experts said that the probe could result in new tariffs or exclusions, changing the cost dynamics of truck manufacturers, and discouraging overseas production.
US FAA funds system for preventing accidents involving runaway aircraft
The Federal Aviation Administration announced on Tuesday that a system had been installed at Philadelphia International Airport to stop an airplane from taking off.
The FAA granted $8.5 million for the first Engineered Material Awaiting System at the airport, which is a system of 2,000 tiles that are designed to stop an aircraft overrunning traveling up to 70 knots. The system is designed to stop an overrunning aircraft traveling at speeds up to 70 knots by using a crushable material that's installed and compressed by the landing gear.
At a Tuesday press conference, Philadelphia Mayor Cherelle Park said: "This process decelerates the aircraft and stops it for safety."
Over 60 US airports have 117 systems, which are installed in areas where the excess land is not enough to extend beyond runways. Philadelphia was the 21st busiest U.S. Airport last year, with 31 million passengers. American Airlines accounted for two-thirds.
FAA Administrator Bryan Bedford stated that the system would allow for the use of the 5,000 foot long runway by business jets, smaller commercial aircraft, and to ensure the runway met agency standards. It will also help increase the capacity. Bedford stated that this is a win-win situation. We can now be confident that if there is a refused takeoff, the arrestor system ensures passenger and crew safety.
The project involved demolition of an existing service road, the installation of utilities, storm water management, and ground settlement monitoring.
Bedford said that the system was not cheap. It's an expensive upgrade, but it adds incremental capacity by taking essentially unusable space.
In December, a crash of a Jeju Air Boeing 737-8 in South Korea killed 179 people after the plane belly-landed at Muan International airport and skidded away from the end of runway. It exploded in a fiery fireball when it slammed against a wall. There have been questions raised as to why there wasn't a system in order to prevent planes from overrunning the runway and hitting the wall. (Reporting and editing by Nick Zieminski, David Shepardson)
(source: Reuters)