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Fuel prices are a concern for Norfolk Southern in the third quarter, despite gains in freight share.
Norfolk Southern executives told investors on Tuesday at the Morgan Stanley conference that higher fuel prices will 'create a significant headwind for the third quarter. CFO Jason Zampi stated that fuel prices were expected to peak in May. However, continued increases now represent a roughly 250-basis point headwind for Norfolk Southern's Operating?ratio when compared to expectations two months earlier. He said that the third-quarter performance is expected to be slightly lower than normal seasonal trends. Executives see continued incremental gains in freight market share, even with the current fuel pressure. Norfolk Southern's next big opportunity to move freight from highways onto rail is during the next year's bidding season for intermodal contracts. Zampi stated that customers have "mostly passed" tariff uncertainty. He described?tariffs?as a one-time event which no longer appears to be having a significant influence on markets like automotive. He said the Middle East conflict remains a greater concern due to its 'impact on fuel costs and global shipping routes. The executives stated that, in regards to the proposed merger between Union Pacific and BNSF Railways, the regulatory review was "moving in line" with expectations. They also noted that the current timeline provides greater transparency into the process.
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US agency asks Tesla to provide answers on Cybercab certification
The?U.S. The?U.S. NHTSA stated that Tesla was required to answer questions such as whether Tesla used temporary human driver controls, or any other equipment in its certification of compliance. The auto safety regulator announced this month that it would be examining the data and process the EV maker used to demonstrate compliance with federal motor vehicles safety standards prior to deploying the robotaxi. Tesla and other robotaxi firms, including Google's Waymo, have supported plans by the Trump administration to change regulation so that these vehicles don't need to have steering wheels, break pedals, back-view mirrors, or other equipment needed by human drivers. Robotaxi critics are against the change, stating that the rules shouldn't be waived until companies can prove autonomous vehicles to be safe. NHTSA asked Tesla if the "Cybercab" robotaxis could be "driven by a person". Also, if the touchscreen of the vehicle had any controls that would allow occupants to move the vehicle. Tesla is also asked to provide answers on questions such as the maximum speed of the robotaxis, its geographical limitations or restrictions based on time and day. Tesla launched its two-seater Cybercabs commercially in Austin, Texas on September 3. The company said that it would gradually expand this service to other vehicles and locations. NHTSA stated that the Cybercab does not have conventional manual controls such as a steering column, brake pedals, accelerator pedals, or mirrors. In June, the agency suggested that it would end a government requirement for self-driving cars to have manual brake pedals. This move would make it easier for?such vehicles to be deployed on U.S. highways without human controls. NHTSA has also proposed changes to the federal safety standards that would allow autonomous vehicles to be driven without additional driver equipment. Existing standards will remain in place until these are finalized. Tesla didn't immediately respond to a comment request. According to the existing law, self-driving cars do not require NHTSA approval as long as they include steering wheels, pedals for braking, mirrors and other features that are common in human-controlled vehicles. NHTSA has the authority to approve petitions that would allow up to 2,500 vehicles to be operated on U.S. roadways without human controls. NHTSA granted Amazon's Zoox unit a petition in July for the limited commercial deployment its novel steering wheel-free robotaxis. This was a first for autonomous ride industry.
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Ecopetrol accepts board revamp backed by government
The newly-installed government of President Abelardo de La Espriella approved on Tuesday a major reorganization of the board at Colombia's state controlled oil company,?Ecopetrol. This comes as the company is reeling from corruption allegations and yet another senior management shake-up. The current chairman Luis Felipe Henao, Cesar Loza and Ricardo Rodriguez Yee were reappointed as members of the nine-member Board. The new board will decide whether Henao continues as chairman at a future meeting. The new management comes just a day after Ecopetrol announced the departure of?acting CEO Juan Carlos Hurtado by mutual consent, with effect from Tuesday. This announcement extended a period of turmoil for Colombia's largest company. Ecopetrol announced late Monday that Camilo Barco would be taking over as interim CEO. Local media attributed Hurtado’s departure to alleged irregularities with contracting and appointment. Ecopetrol didn't immediately respond to an inquiry for comment about the move. Hurtado was previously the head of hydrocarbons and had been leading the company as an interim leader since April when Ricardo Roa left over allegations of influence peddling, campaign finance violations, and former President Gustavo Petro’s 2022 election campaign. The markets are now waiting for the government to choose a new CEO. Ecopetrol is the largest oil producer in Colombia. The Colombian Government owns 88.49% of it. Ecopetrol also operates Colombia's main refineries, and the majority of its oil and fuel pipe network. Since De La Espriella's appointment in early August, dozens of?Ecopetrol employees have quit or been fired. Ecopetrol is?hit by a series of scandals?involving allegations of corruption and influence-peddling by officials appointed under Petro's government. The people under investigation haven't been convicted.
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Boeing to salvage Turkish Airlines delayed order, sources claim
Four people with knowledge of the matter claim that Boeing is nearing the completion of a delayed order to purchase 150 737 MAX aircraft after Turkish Airlines threatened to walk away from a high-profile contract over a dispute with engine manufacturer CFM. Three people have confirmed that the deal is now on track and could be signed as soon as next week. The agreement, which was part of a package containing 225 jets, had been delayed by a disagreement regarding the airline's demand for a industrial deal on maintenance of engine. Boeing and GE Aerospace's and France Safran's joint-ownership of CFM engine maker CFM declined to comment. Turkish Airlines has not responded to a comment request. Airlines are increasingly forced to negotiate long-term deals for engines at the same time they order new jets due to a recent shortage of supply chains and increasing spares prices. This adds complexity?to high-profile aircraft deals. If the order was confirmed publicly, it would prevent a potentially embarrassing reversal last year of the White House announcement. This is one of several Boeing deals that are associated with?U.S. Two sources, who asked not to be identified, said that the president was involved. Turkish media reported that Trump and Erdogan will'meet again next week to coincide with the United Nations General Assembly meetings in New York. The White House did not immediately comment on whether or not the two leaders will meet. Industry sources claim that the core of the dispute revolves around who should be liable for the costs of long-term repair. Maintenance Plant 'PREMIER Turkish Airlines has a fleet of over 400 Boeing and Airbus aircraft, making it one of the largest airlines in the world. It was only a few weeks after the announcement of the larger Boeing deal that it suddenly?threatened' to switch from the 150 MAX planes in the order to Airbus citing a price dispute with CFM. Sources in the industry later revealed that the airline wanted to establish its own maintenance facility?for the engines that power the 737 MAX, by joining directly the top tier CFM partners. This would give accelerated access to the latest repair technologies. The two sides did not appear to have reached an agreement about the "Premier Maintenance Plant" immediately. Larry Culp, GE Aerospace's CEO, commented on the unusual spat that occurred last October. He compared the airline's threat of cancelling the deal with negotiating "new contracts in public" and said GE's price strategy reflected value to the customer. A senior Turkish Airlines executive said at an industry conference on Monday that the airline continues to consider more aircraft orders to support the rapid expansion?of its Istanbul hub. Okan Bas, Senior Vice-President Finance of the airline, told the International Society of Transport Aircraft Trading meeting that the airline was studying regional jets - such as the Embraer E2 and Airbus A220 - while comparing them to the larger Boeing 777X or Airbus A350-1000. He refused to comment on the Boeing MAX order.
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Enbridge opens the season for a proposed Texas natgas pipeline
Enbridge, a Canadian energy company, announced?that on Tuesday it began a non-binding public season for its proposed West Texas Express gas pipeline. The pipeline would transport gas from the Waha region of the Permian Shale in the west to markets around El Paso. The Permian, located in West Texas and eastern New Mexico, is the largest oil-producing shale region in the United States. The Permian basin, located in West Texas, eastern New Mexico and Pennsylvania, is the second largest gas-producing shale region in the United States. The U.S. Energy Information Administration says that as oil and gas are produced more, pressure within the reservoir decreases. Gas is easier to produce under lower pressures. This increases the ratio of gas to oil. According to EIA, the gas-to-oil (cf/b) ratio has increased steadily over the last five years. It now averages nearly 4,200 cubic foot of gas for every barrel of oil. This is a 16 percent increase from 3,600 cf/b around 2021. To process and transport more gas, pipelines and?energy infrastructure will be needed. Enbridge, who transports 20% of gas in the U.S. said that its proposed West Texas Express project is in response to the growing demand for reliable supplies by proposed 'power generation, utilities and generators, and industrial customers like data centers in West Texas, and markets in Mexico New Mexico and Arizona. West Texas Express will include 150 miles of pipeline with a capacity to transport up to 2 billion cubic feet per day. One billion cubic feet can supply gas to five million U.S. homes for one day. Enbridge stated that it is "targeting" a date of in-service in the fourth quarter 2029, subject to securing enough commercial support and obtaining necessary approvals. The open season, which is not binding, began on September 10 and ends on September 25.
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Saudi cancels oil shipments after pipeline damage, leading buyer seeks alternatives
Trade sources report that Saudi Arabia has cut off oil shipments from Europe to the Red Sea after drone attacks damaged its main export pipeline. This prompted top customers, such as Poland, to look for alternatives when cargo prices reached $120 per barrel. Saudi Arabia blamed the attacks on Iraqi militias, forcing the kingdom to shut down its East-West Desert Oil Pipeline on Friday. This has saved it from the worst of impact of the Strait of Hormuz closure over the past six months. On Tuesday, oil trading and shipping sources reported that Saudi Arabia informed European customers of the cancellation of some September-loading cargoes and that oil loadings in Yanbu at the Red Sea Port had been suspended. Saudi Aramco, the state oil company, declined to comment. Trading sources say that the cut in Saudi oil flows through the Red Sea is likely to prompt Saudi Arabia to try to export more oil via Strait of Hormuz, using dark shipments similar those used by United Arab Emirates and Iraq. These shipments allowed Gulf oil producers export 7 to 9 million barrels of crude oil per day, or 30 to 40 percent more than before the war. Brent oil futures are trading at $108 per barrel, and cargo prices on the physical market in Europe have risen even more. Brent is the key benchmark for dated oil. LSEG data indicated that the price of a barrel was around $122. Data from Vortexa shows that Saudi Arabia loaded 22 millions?barrels? of oil onto 12 vessels in the week between September 7 and 13, compared to the 6 to 7 vessels each week during the previous three weeks. It was not possible to determine immediately how many shipments bound for Europe or how long Yanbu loading would be suspended. TRADERS: ORLEN, POLAND'S PRESIDENT, RUSHES TO FINDS ALTERNATIVES Five industry sources reported that Orlen PKN.WA, a Polish integrated oil company, was rushing to locate crude oil cargoes in the North Sea or elsewhere to replace Saudi imports. Aramco was Orlen's biggest supplier in 2022, and supplies about 40% of its oil. This helped wean Orlen off Russian oil while making it dependent on the Saudi producer. Orlen declined comment on specific commercial transactions but said that it actively manages the supply portfolio in order to ensure the continuous operation of its'refining assets. Orlen's spokesperson said that "adjusting and optimizing purchase volumes" is an ongoing, standard part of their operations. This is driven by current production requirements?and changing markets conditions. Orlen bought several crude oil cargos in spot auctions between Friday and Monday. Two sources said that it purchased grades from the North Sea, including Grane and Johan Sverdrup. Two sources said that it?also bid for grades from further afield, including U.S. WTI Midland as well as Kazakh CPC blend. One trader reported that it issued a second tender on Tuesday for the purchase of North Sea or Algerian oil for October delivery as well as Guyanese for November delivery. However, results have been slow to emerge. Orlen's subsidiaries own and operate oil refineries throughout Poland, Lithuania,?and Czech Republic. Kpler data showed that the Baltic port of Gdansk in Poland has received approximately 160,000 bpd Saudi crude so far this year, while Lithuania's Butinge has received 63,000. The tenders had not been published and the results of the bids could not be confirmed directly with the counterparties. The company spokesperson confirmed that the feedstock deliveries to Orlen's refineries continue uninterrupted.
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US FAA: billions of dollars more required to modernize air traffic management
The Federal Aviation Administration's head said that the first phase of a plan to "modernize air traffic control" will cost "billions of dollar more than Congress approved." The Congress approved $12.5 billion in funding for air traffic control, which included $9 billion to modernize air traffic and $3.5 billion to build new facilities. Bedford told a U.S. House of Representatives subcommittee that phase one would cost $16 billion. He said that the FAA was funding the 'gap' out of their facilities and equipment budget. Bedford, FAA's director of project management, urged lawmakers for approval. The FAA is asking for at least $10 billion more to complete phase two. Bedford said, "The agency is working to scale up in order to get it done and done correctly." In a report released by the Government Accountability Office on Tuesday, the FAA was found to have underestimated the costs associated with operating the new system and failed to set out a schedule for reform completion. GAO estimates that the FAA has more than 11,000 projects in phase 1, which it previously estimated to be worth $10.6 billion. Bedford stated last year that it was looking for $15 billion to $16 billion in phase one. This is what caused the shortfall. Congress approved funding for the upgrade of the "aging air traffic control" system and to increase the hiring of controllers. This comes after decades of complaints about airport congestion, flight delays, and "a series of technological issues". GAO reported that the?cost of telecommunications upgrades jumped from $4.75 billion dollars to $5.91billion dollars. Bedford said that outdated copper wires for telecoms should be replaced completely by September 2027. In December, the FAA awarded a $1.5billion contract to Peraton (owned by Veritas Capital) for overseeing modernization efforts.
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US Energy chief says Saudi Arabian oil pipeline could be back in days
Chris Wright, the U.S. Energy Secretary, told CNBC that crude oil would be flowing through Saudi Arabia's East-West pipeline in a few days after it was temporarily closed by Iran-aligned group attacks. Wright told reporters on the sidelines of a G20 meeting in Houston that "it's still detailed, but it will be measured by days." He said Saudi Arabia is taking steps to get more oil out the Strait of Hormuz, with the help of the U.S. Military. Since the U.S. War on Iran, the 1,200-km (745-miles) East-West Pipeline that runs across the Arabian Peninsula has served as the primary route for Middle?Eastern Oil supplies to the world. The strait connecting Iran and Oman is now largely closed. The pipeline was moving between 4 and 5 million barrels a day, which is 4% to 5.0% of global oil supply. This spared Saudi Arabia from the disruption that has hit other Gulf oil and?gas?exporters. Washington has so far refused to support Saudi Arabia's requests for direct military action beyond intelligence assistance, according to three sources. Monday. U.S. president Donald Trump stated that he spoke with the Saudi crown Prince over the weekend. He also said that Iran-aligned Houthis who have launched drone and missile attacks against the kingdom from Yemen had contacted Washington to urge it to remain out of the conflict.
Canada's airports are expected to attract a large amount of investment from pension funds at home.
The Canadian Transport Minister said that he expected a'strong interest' from Canadian pension funds and possibly Australians as well, when the country opened its four biggest airports for private investment.
In an interview, Transport Minister Steven MacKinnon said: "We expect a very strong Canadian participation in these concession agreements."
The Canadian investors have proven over time that they are very adept at investing in other jurisdictions.
Mark Carney, the Canadian Prime Minister, said earlier that his government is seeking private investment via long-term concessions for airports to be operated in Toronto, Montreal?Vancouver?and Calgary as part a campaign to stimulate the economy.
The move will not allow for a sale or a change in the public ownership. Carney stated that investors did not need to be "strictly Canadian" and there would be competition.
MacKinnon said that foreign investment approvals, and national security testing would be included in any deal.
Infrastructure companies are investing billions in airport terminals, as they see a strong demand for air travel in the future. This includes countries such as Australia and the United States.
Macquarie Asset Management of Australia, which invested in a new terminal airport south of Montreal, believes that Canada's infrastructure for transportation has "significant potential" to attract further investment, according to Karl Kuchel. He is the head of Infrastructure in the Americas at the company. The opportunities in the transport sector "have been limited in recent times compared to other infrastructure sectors," Kuchel said.
Both La Caisse, a Canadian pension fund, and IFM Investors in Australia have said that they see opportunities from this announcement.
MacKinnon stated that it is 'fair to say' that Australian investors who are willing to welcome Canadian investments in their country, in infrastructure and other areas would be eligible investors.
Carney's proposal has been criticized by labour groups, who claim that private investment has led to increased costs for passengers.
Lily Chang is the secretary-treasurer for the Canadian Labour Congress. She said that private investors do not invest billions in airports unless there's a chance they can make back billions.
MacKinnon stated that Canada will learn from other countries' experiences.
He said, "We're not the first to do this." We'll follow the best practices we've seen in a fair, open process that will certainly allow Canadian investment to be made in these facilities.
(source: Reuters)