Roll Call: Latest News on Capitol Hill, Congress, Politics and Elections
December 18, 2014

December 18, 2014

The Most Encouraging Transportation News Of 2014

461200117 11 445x303 The Most Encouraging Transportation News Of 2014

A man walks to catch the street car on Canal Street in New Orleans. (Photo by Sean Gardner/Getty Images)

To give a retrospective of the past year’s events and trends in transportation, we’ve asked a range of analysts, trade association leaders, and advocates to tell us what they think was the most encouraging, or most discouraging, transportation development, trend, or event of 2014.

Here’s the first installment from our respondents…. (and our thanks to all of them!)

 

“The most encouraging transportation trend in 2014 was voter rejection of several light-rail and streetcar lines. Elections in Florida, Texas, and Virginia showed that voters remain skeptical of putting large amounts of money into transit projects that yield trivial benefits.”

Randal O’Toole, Senior fellow at the Cato Institute and author of Gridlock: Why We’re Stuck in Traffic and What to Do About It

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December 17, 2014

Broken Water Main Highlights Infrastucture Weaknesses

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Construction workers repairing roads in DC. (CQ Roll Call)

Metrorail service in the nation’s capital was delayed Tuesday morning after a water main burst near 12th and F streets NW in downtown D.C. Service on the Orange, Blue and Silver lines was suspended between the L’Enfant Plaza and Farragut West stops while crews worked to repair damage.

The incident was another reminder of how one infrastructure system’s problems can have a domino effect on others.

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Public Transportation Use Up A Bit In Third Quarter

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Commuters wait for the subway at the Fulton Center station in New York City (Photo: Jewel Samad/AFP/Getty Images)

Public transportation ridership was up by 1.8 percent in the third quarter of the year, compared to the same period in 2013, the American Public Transportation Association reported Wednesday.

“High and volatile gas prices have played a part over the past nine years in convincing people to try public transportation,” said APTA President Michael Melaniphy. “Now that gas prices are declining, many people are still choosing to ride public transportation. They have discovered that there are other benefits to taking public transit besides saving money.”

More than 2.7 billion trips were taken on public transportation in the third quarter, according to the APTA report.

But Census Bureau data indicate that only five percent of all Americans who commute to work use public transportation.

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For FedEx, Fuel Price Drop Is Not All Good News

460564358 445x296 For FedEx, Fuel Price Drop Is Not All Good News

Workers prepare to offload a FedEx plane at Newark, N.J. (Photo by Andrew Burton/Getty Images)

FedEx chief financial officer Alan Graf said Wednesday the company had “a spectacular second quarter” in fiscal year with a 36 percent increase in earnings per share.

But Graf said on a conference call for investors that performance wasn’t largely due to the dramatic drop in oil prices.

The jet fuel price decline provided “only a slight benefit to operating income” due to the way FedEx passes along costs to its customers through its fuel surcharge and the way it buys fuel.

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FedEx See Big Port Congestion Spillover Effects

93768384 445x296 FedEx See Big Port Congestion Spillover Effects

FedEx chairman and CEO Fred Smith (Photo: Chip Somodevilla/Getty Images)

FedEx chairman and CEO Fred Smith said Wednesday, “The slow-down in the West Coast ports has been a much bigger deal than people think and a tremendous amount of inventory was simply not put through the ports in the time frame that the retailers had expected.”

Smith spoke on his company’s earnings conference call for the second quarter of its 2015 fiscal year.

The International Longshore and Warehouse Union has been in contract talks for months with port operators represented by the Pacific Maritime Association. In addition, there have been severe problems with the distribution of truck chassis and other factors slowing down traffic.

Smith said “because of these delays at the West Coast ports and the East Coast ports, because a lot of people saw this coming and diverted traffic into the East Coast ports, we [FedEx] received a lot of traffic on the two coasts which normally we would have anticipate being from distribution centers in the middle of the country.”

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December 16, 2014

Franken Not Satisfied With Uber Privacy Answers

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Sen. Al Franken, D-Minn., was elected to a second term on Nov. 4 (Photo By Bill Clark/CQ Roll Call)

It’s the final episode in the rhetorical skirmish between Sen. Al Franken, D-Minn., and the fast-expanding car service Uber before Franken, now chairman of the Judiciary Subcommittee on Privacy, Technology, and the Law, becomes a member of the Senate minority.

Franken said Monday he’d gotten a reply to his Nov. 19 letter to Uber in which he’d posed 20 questions about its potential misuse of customers’ data.

Franken said he wasn’t satisfied with Uber’s response.

“While I’m pleased that they replied to my letter, I am concerned about the surprising lack of detail in their response,” he said, adding that Uber “did not answer many of the questions I posed directly to them. Most importantly, it still remains unclear how Uber defines legitimate business purposes for accessing, retaining, and sharing customer data. I will continue pressing for answers to these questions.”

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Robust Boeing & Even More Airports For China

460310358 445x287 Robust Boeing & Even More Airports For China

Boeing Chairman and CEO Jim McNerney (Photo: Mandel Ngan/AFP/Getty Images)

In a sign of a robust commercial aviation industry and a confident corporate leadership, Boeing Chairman and CEO Jim McNerney announced Monday that his company was increasing its quarterly dividend by 25 percent to 91 cents per share.

He cited “the solid growth outlook for commercial aviation” as part of the basis for the higher dividend, which the company has increased by 88 percent over the past two years.

Meanwhile, market observers have been puzzling over whether the plunge in oil prices is a welcome stimulant to economic growth, or an early warning sign of weakening growth, especially in Pacific Rim and Asian economies.

McNerney assured investors in late October that declining oil prices wouldn’t lessen airlines’ demand for the more fuel-efficient planes that Boeing makes.

Oil prices would need to fall “a long way from where we are now” before “you begin to see even [an] incremental impact” on airlines’ demand for more fuel-efficient aircraft, he said.

But when McNerney said that, the Brent crude benchmark was at about $85 a barrel; today it is below $59 a barrel for the first time since the spring of 2009.

China has, of course, been one of Boeing’s best markets for years, and there was related aviation news from China Tuesday with the Financial Times reporting that the top economic planning agency has given its approval to a new $13 billion airport in Beijing.

But the FT portrayed this as “part of government efforts to boost flagging growth by accelerating construction of state-led infrastructure projects.”

The FT notes that Beijing’s existing airport was completed only six years ago. (Just for comparison: New York City’s LaGuardia Airport was built in 1939.)

“An oversupply of airports is different than an oversupply of planes,” explained Derek Scissors, a resident scholar at the American Enterprise Institute who specializes in Asian economic trends.

“China is plainly building too many airports (almost 100 more on the way) and many of them are too large. This is merely to boost short-term economic numbers, and will waste a great deal of money.”

But he added, “Since it’s state-controlled, top to bottom, it doesn’t qualify as a bubble. Just a bad idea.”

He also said, “The Chinese don’t get the same benefits from over-ordering planes and there are no reports of aircraft sitting idle, as there are with facilities. The main threat to Boeing is longer-term: the Chinese are trying, not yet successfully, to make their own aircraft.”

In the near term he added, “Boeing is at risk of overstating the vigor of the Chinese economy and thus the demand for its products.”

December 15, 2014

High-Profile Toll Project Opens in D.C. Suburbs

One of the nation’s most prominent public-private toll road partnerships opened Sunday in Virginia with a Yuletide two-week free sample period before tolls begin on a 29-mile stretch of Interstate 95 south of Washington, D.C.

There’s been some backlash against highway tolling in Texas and other states, and a separate and highly contentious P3 project, U.S. 460 in the Hampton Roads area, has been halted by Democratic Gov. Terry McAuliffe.

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Senate Rebuffs Cruz Critique of Travel Promotion

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Sen. Ted Cruz, R-Texas (Photo By Tom Williams/CQ Roll Call)

In his last-ditch effort to stop the $1.1 trillion omnibus spending bill on Friday night, Sen. Ted Cruz, R-Texas, fired a glancing shot at Senate Majority Leader Harry Reid, D-Nev., and at his support for Brand USA, a public-private partnership Congress created in 2010 to persuade foreign tourists to visit the United States.

Cruz ended up on the short end of a 56-to-40 Senate vote to pass the omnibus which includes a provision reauthorizing Brand USA.

The travel promotion agency is funded through a $10 fee added to the application charge paid by visitors to the United States from the 38 countries in the Visa Waiver Program. The 38 include most of the western European countries as well as a few others such as Japan and Australia.

Federal backing for Brand USA, limited to $100 million a year, is matched by U.S. travel and tourism companies and state and local visitor agencies.

In a Senate floor speech Friday night, Cruz called Brand USA “another bit of corporate welfare,” adding that it “is one of the current majority leader’s pet projects because it helps promote casinos in his home state. Last I checked, casinos were very profitable endeavors that didn’t need the taxpayers helping them out, didn’t need the Congress serving your hard-earned dollars and handing it out to promote casinos.”

But Jonathan Grella, senior vice president of public affairs at the U.S. Travel Association, said Brand USA is about far more than luring foreigners to Las Vegas.

He said many businesses in Texas who benefit from foreign tourism “would vehemently disagree with the senator, as would the main sponsors of the [Brand USA authorization] measure who hail from Minnesota, Missouri, Vermont, and Florida,” referring to Sen. Amy Klobuchar, D-Minn., Sen. Roy Blunt, R-Mo., Rep. Peter Welch, D-Vt., and Rep. Gus Bilirakis, R-Fla.

“I think that says everything about how broad the benefits from Brand USA go,” Grella said. “The genesis of the focus on Vegas in particular is born out of the majority leader’s support. And anything that the majority leader supports, in the view of others, must be a sop to his home state, which is obviously not accurate.”

He added, “This program helps create jobs in all 50 states and that’s why it had such broad bipartisan support…. Many of the most active supporters are from smaller destinations who could use the help” in attracting foreign visitors.

Prior to the 2010 law which created Brand USA, Grella said, the United States was the only major developed country that did not have tourism marketing program.

The Week Ahead: FedEx Peak Day, Spending Bill Signed

107562647 445x289 The Week Ahead: FedEx Peak Day, Spending Bill Signed

A driver unloads his truck at the FedEx sort facility at the Oakland International Airport (Photo by Justin Sullivan/Getty Images)

This week includes what FedEx expects to be its busiest shipping day of the year, as well as the final act of this year’s spending bill melodrama, as President Obama puts his signature on a $1.1 trillion discretionary spending bill which includes a few plums for mass transit and the U.S. travel industry.

Monday

FedEx predicts that today will be its busiest shipping day of the year, estimating that its workers, trucks, and aircraft will carry 22.6 million shipments around the world.

FedEx rival UPS said in October that it expected its 2014 peak delivery day to be a week from today, on Monday, Dec. 22, when it expects to ship more than 34 million packages.

Tuesday

The Senate may vote on a House-passed bill to retroactively extend some 50 tax preferences.

The package includes a few provisions benefiting biodiesel and other biofuel producers and one which would restore tax break parity between mass transit commuters and drivers who get employer-subsidized parking.

Mass transit advocates say the retroactive parity, which applies only to 2014, will benefit almost no mass transit users, because employer payroll systems aren’t set up to recoup the money that commuters could have gotten if tax break parity had been in effect starting Jan 1, 2014.

Wednesday

FedEx reports its earnings for the second quarter of its fiscal year which began June 1.

Like the passenger airlines, FedEx should be benefiting from the drop in jet fuel and diesel fuel costs, and company executives can offer more details on that point in their conference call for investors Wednesday morning.

After languishing in the first half of the year, FedEx’s stock price is up 25 percent since June, which also is the period in which the price of oil has fallen more than 40 percent.

For the 2014 fiscal year which ended in May, FedEx spent $4.5 billion for fuel, both for its jet aircraft and its ground vehicles.

December 12, 2014

Friday Q & A: World Shipping Council’s Christopher Koch, Part Two

457699558 445x295 Friday Q & A: World Shipping Councils Christopher Koch, Part Two

A cargo ship is loaded with containers for export at Jakarta, Indonesia (Photo: Romeo Gacad/AFP/Getty Images)

Here’s the second part of our interview with Christopher Koch, president of the World Shipping Council.

Regarding port congestion, especially at Los Angeles and Long Beach, how much of that is due to the shipping companies using bigger and bigger ships so that when they arrive, there’s more stuff to unload?

The terminals are still going to have to handle the same volume of cargo. It’s coming in bigger blocks.

There are many parents to the congestion on the West Coast….  These same ships are not causing congestion problems in the Asian ports where the cargo is being loaded so I think you can’t really lay it off all on big ships.

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Week In Review: Drones, Macadamias, Bankruptcies

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An unmanned aerial vehicle arrives with a delivery at Deutsche Post headquarters in 2013 in Bonn, Germany. (Photo by Andreas Rentz/Getty Images)

With the unmanned aerial vehicle industry in the United States trying to emerge from its infancy, members of the House pressed Federal Aviation Administration official Peggy Gilligan at a hearing Wednesday on why the agency seems so tardy in issuing a rule on small UAVs.

If FAA approves drones for commercial use, they’d enable farmers to monitor their crops and real estate agents to scan neighborhoods and sell houses. Members of the House Transportation and Infrastructure Subcommittee on Aviation said the FAA’s slowness is stifling innovation.

One member of the panel, libertarian-minded Rep. Thomas Massie, R-Ky., also worried about whether drones will encroach on your backyard and violate your property rights.

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Friday Q & A: World Shipping Council’s Christopher Koch, Part One

459737176 445x286 Friday Q & A: World Shipping Councils Christopher Koch, Part One

Cargo ships unload goods in the Tunisian port city of Rades. (Photo: Fethi Belaid/AFP/Getty Images)

The big-screen televisions and cotton shirts that Americans buy come across the ocean on container ships which make today’s global economy possible. We spoke this week with Christopher Koch, president of the World Shipping Council which represents Maersk, Hanjin, APL, and other major shipping companies.

Is there legislation likely to emerge from Congress next year that would be of concern to the shipping industry?

There’s nothing that the shipping industry is particularly looking to Congress to do next year. There’s always the ongoing question of the ports working with the Army Corps of Engineers on getting dredging money for particular deepening projects or maintenance projects.

Are U.S. ports at a disadvantage because not enough is spent on dredging, maintaining, etc?

In terms of the deep-water container ports, the major container ports are being maintained at the [required] depths – so Baltimore is at 50 feet, Norfolk is at 50 feet, New York, I believe, is finished going to 50 feet, Charleston is in the process of getting there, Savannah is in the process of getting to 48, Miami is at 50.

And on the West Coast you don’t have any draft problems at Seattle-Tacoma, Oakland or L.A.-Long Beach.

I think the ports, from a dredging perspective, are doing OK. They would like to have more money to get it done faster.

How has the decline in the price of oil affected the industry?

There’s always a lag. The shipping lines always try to recover their fuel costs from customers and their success is always questionable, so it’s always a cost pressure on them.

Clearly the dropping of fuel prices has been helpful to take some of the cost pressure off.

But at the same time, many of those fuel costs are recovered through something called a “BAF” or a bunker adjustment factor. For the contracts that use those kind of mechanisms, the price automatically drops to the customer when the fuel price drops.

I’ve seen reports that bunker [fuel] prices have been coming down since this price reduction started a couple of months ago.

At the same time, what the industry is facing, as of Jan. 1, is a very steep increase in the cost of fuel because of the implementation of the requirements in the emission control areas.

Emission control areas are areas set up by governments under the international marine pollution convention that provide particularly strict sulfur standards in marine fuel.

The U.S. and Canada have an emission control area jointly within 200 miles of the U.S. shores; there’s also one in the Baltic, one in the North Sea, and one in the Caribbean.

In those areas you have to use low-sulfur fuel and that’s considerably more expensive.

Amid Airline Resurgence, A Reminder Of Losses

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American Airlines planes parked at gates in the Miami International Airport (Photo by Joe Raedle/Getty Images)

For readers with short memories, yes, sometimes airlines do file for bankruptcy.

It used to happen quite often, but it may seem a remote possibility at a time when airline are reaping lush profits.

The International Air Transport Association announced this week that airlines are expected to post a collective global net profit of nearly $20 billion this year and $25.0 billion in 2015.

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December 11, 2014

Corker, Coons Prevail In Battle Over Cargo Preference

Bob Corker 30 111312 445x316 Corker, Coons Prevail In Battle Over Cargo Preference

Sen. Bob Corker, R-Tenn., soon to be chairman of the Foreign Relations Committee (Photo By Douglas Graham/CQ Roll Call)

Sen. Bob Corker, R-Tenn., Sen. Chris Coons, D-Del., and food aid groups such as Oxfam America have prevailed in their effort to block a provision in the Coast Guard bill that they said would have unnecessarily added to the cost of shipping food aid to countries in need.

As we reported last week, Corker and Coons had pledged to block the bill if the provision remained in it.

The cargo preference, which dates back to 1954, requires that a certain percentage of commodities purchased by the government be shipped in U.S.-flagged vessels. Under current law, 50 percent of food aid must be shipped on U.S. flag-ships.

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