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Infrastructure in the News 9.6.16


Huffington Post: The Battle For The Future Of Transportation Seems Imminent

Pay no attention to the cordial press releases. Google ― sorry, Alphabet ― sure looks like it’s thinking about taking on Uber.

Reuters: Air freight demand growth gathers pace in July – IATA

Demand for global air freight rose 5 percent in July, at the fastest rate in almost 18 months, the International Air Transport Association (IATA) said on Tuesday.

Wall Street Journal: Logistics, Transport Hiring Soared in August (full article follows Morning Transportation)

Logistics and transportation companies added 14,900 jobs in August, the U.S. Labor Department said Friday, extending strong hiring growth for a second month despite reports of low shipping volumes and manufacturing activity.

New York Times: On the Menu When Congress Returns From Recess

Members of Congress return from a seven-week recess on Tuesday in a rush to get out the door yet again to campaign for re-election. Still, they have a few items they must address and some optional items.

Wall Street Journal: Hanjin Shipping Bankruptcy Unlikely to Ease Glut of Vessels (full article follows Morning Transportation)

The increasingly likely demise of one of the world’s biggest container-shipping companies may offer some short-term relief to a sector battered by a global downturn in trade. It also could hasten further industry consolidation.

Wall Street Journal: The Feds Could Block the Road to the Driverless Car (full article follows Morning Transportation)

Karl Benz’s 1886 Patent Motorwagen, considered the first production automobile, didn’t look much like today’s cars. It was modeled on horse-drawn carriages, though it lacked doors or a roof. The vehicle also had three wheels, not four, and a tiller rather than a steering wheel.

Wall Street Journal: Car Makers Scrutinized on Self-Driving Claims (full article follows Morning Transportation)

A Mercedes-Benz magazine ad this summer described a new sedan as a “self-driving car from a very self-driven company.” On television, the Daimler AG luxury brand showed a prototype autonomous car with passengers facing one another before cutting to a current vehicle with limited automatic steering.

Wall Street Journal: Presidential Campaigns Leave America’s Mayors Frustrated (full article follows Morning Transportation)

Donald Trump will make a rare campaign appearance in an inner-city setting on Saturday as his presidential campaign works to cut into Democratic rival Hillary Clinton’s significant advantage among black voters.


Michigan Live: Detroit banks on green infrastructure to rescue city from heavy rains

Detroit has a water problem. Or, more correctly, it has a stormwater problem.

The Register-Guard (Oregon): Over-regulation hindering freight rail’s progress

Oregon, home to the most acres of forest in the continental United States, produces nearly one-fifth of the nation’s lumber — a commodity that is essential to the state’s economic success. Freight railroads play a vital role in moving these products across the country, which is why policymakers need to ensure they do not handcuff the industry with unnecessary red tape.

Associated Press: Sinkhole shuts part of South Carolina highway

Part of a major highway near a South Carolina resort town was shut down for about 20 hours because of a sinkhole.

Washington Post: Delivery of Metro’s new 7000-series rail cars back on track

Metro’s troubled new rail cars, for which production and delivery have been delayed by design flaws, are back on schedule, transit agency officials said.

Associated Press: Haslam to call special session to save $60M in highway funds

Tennessee Gov. Bill Haslam said Friday he’ll call a special session of the General Assembly to try to fix the state’s drunken driving law and save $60 million in federal highway funds.

Washington Post: The case for the Purple Line

Opponents of the Purple Line, the light-rail project that would connect Prince George’s and Montgomery counties, often suggest that it be slowed to allow an evaluation of other transportation options.

Associated Press: Louisiana flood damage at least $8.7 billion, governor says

Louisiana Gov. John Bel Edwards says his state had more than $8.7 billion in damage from catastrophic flooding in August, and the figure will increase as officials finish assessing damage to roads and other public infrastructure.

USA Today (Wisconsin): Neenah drives toward annual transportation fee

City officials are examining whether to charge property owners an annual transportation fee to pay for street reconstruction projects.

Associated Press: 27 Years Later, $2.1B Harbor Dredging Project Complete

A $2.1 billion project to deepen navigation channels in New York Harbor has been completed after more than a quarter century and the containment of hazardous waste from decades of industrial operations.

Associated Press: NY to invest in upstate water, sewers, fish hatchery

New York state is investing $1.8 million in several projects in the North Country, including water and sewer upgrades, a fish hatchery and an effort to attract manufacturing jobs.

WELCOME BACK! After a seven-week break, Congress returns with 16 working days to push through a stopgap for keeping the government up and running before lawmakers leave again to campaign. Here's what you can expect to hear about in the next four weeks:

- Money on my mind: The Department of Transportation is waiting to see how Congress resolves the gap between the House and Senate spending bills, which fall short of what the administration asked for by several billion dollars. Policy provisions in the House bill - on the 34-hour restart rule for truckers, funding for high-speed rail in California and funding for Amtrak - will also need to be hammered out.

- Vroom vroom: DOT is expected to release industry guidelines for autonomous vehicles by the end of the summer. Transportation Secretary Anthony Foxx has said he wants to publish a notice this month about an advisory committee on the issue and fill those seats by November or December.

- When the levee breaks: The Senate could consider the Water Resources Development Act this week, unless Democrats block Majority Leader Mitch McConnell from bringing it forward. Minority Leader Harry Reid could try to stall the bipartisan legislation in an effort to first settle debates over appropriations and funding to combat Zika, as Pro Energy's Annie Snider reported for Pros. "The core of the bill comprises a suite of provisions relating to municipal water infrastructure and authorizations for more than two dozen lock, dam, levee and ports projects across the country," Annie reports.

- Big bayou carry me home: Lawmakers will get an update this week on efforts to revive Amtrak service along the Gulf Coast, our Lauren Gardner reported for Pros. The biggest hurdle to bringing Amtrak service back to a route through Louisiana, Mississippi, Alabama and Florida seems to be Coast Guard regulations, which require boats to have the right of way at drawbridges.

- We'll dance the Maritime Waltz: One of Congress' priorities this month will be sending a defense spending bill to the president's desk. That legislation also includes a reauthorization of the Maritime Administration.

IT'S TUESDAY: Good morning and thanks for tuning in to POLITICO's Morning Transportation, your daily tipsheet on all things trains, planes, automobiles and ports. MT missed you as much as you missed MT.

Don't forget to send tips, feedback and, of course, song lyrics to or @brigurciullo.

"Planes fly/High enough to take us anywhere/And we'll go/We'll hear no, breathe no, see no fear/And I know/Trouble will find wherever we are/Keep wishing easy baby/We'll be closer to the stars."

FEDS LEAVE VMT TESTING TO STATES: With $14.2 million in grants awarded to seven states, FHWA has started to roll out its small FAST Act-funded program to test out vehicle miles traveled as a replacement for the gas tax. Concerns over electronic reporting, privacy and fairness to rural areas have held back any plans for nationwide use of a VMT fee. But states now have federal backing to experiment with pilot programs, our Tanya Snyder reports for Pros . California, Delaware, Hawaii, Minnesota, Missouri, Oregon and Washington state will have some tough issues to figure out - including revenue collection, interoperability, public skepticism and how to phase out the gas tax.


Wednesday - The National Emergency Medical Services Advisory Council, which makes recommendations to DOT, kicks off atwo-day meeting. Two House Transportation subcommittees hold a joint hearing on maritime navigation programs. The American Public Transportation Association, NTSB and the American Public Health Association hold a conference call on "public transportation use as a traffic safety tool." FRA holds a hearing on a proposed rule to implement a competitive passenger rail service pilot program. The Unified Carrier Registration Plan Board of Directors meets to continue working on the UCR Plan and Agreement. And the American Moving and Storage Association has a fly-in on the Hill. About 70 members of AMSA will meet with lawmakers to push for a less restrictive 34-hour restart rule, stopping the Labor Department's overtime rule and suspending the Safety Fitness Determination rule.

Thursday - The Atlantic hosts discussions on homeland security since the Sept. 11, 2001 attacks with Secretary Jeh Johnson and former secretary Tom Ridge as well as House Homeland Security Committee Chairman Michael McCaul (R-Texas). The RTCA Special Committee on Rechargeable Lithium Batteries and Battery Systems holds its 25th meeting. Volpe holds a talk with Jeff Risom, managing director of Gehl Studio, called "Making Cities for and with People." And FHWA, Volpe, and MIT present findings from a study on ridesharing technology on college campuses during a webinar.

DEPARTURES LOUNGE: David Connolly, a House Transportation rail subcommittee staff member for the majority, is returning to OMB after more than three years on the Hill. He'll serve as chief of the office branch in charge of budget and policy oversight of DOT and GSA.

CONGRATS! MT sends a big congratulations to House Transportation Democrats' spokeswoman Jen Gilbreath, who got married over the holiday weekend in Portland, Ore., with her boss, ranking member Peter DeFazio, in attendance. We're sure she's bummed about missing out on all our emails this week.

ICYMI: Here's some news you might have missed last week while MT was on hiatus:

** A message from Airlines for America: Every day, U.S. airlines connect 2.2 million people to what matters most. Whether it's a family vacation or an important business trip, the 675,000 U.S. airline employees proudly operate 27,000 flights a day, including the most important one-yours. Airlines for America: We Connect the World. Learn more at **

GOING DOWN TO CUBA: Transportation Secretary Anthony Foxx was on the first commercial flight to the island nation in 50 years, traveling with JetBlue from Fort Lauderdale to Santa Clara last Wednesday, our Jennifer Scholtes reported for Pros. DOT also announced final approval for eight airlines to offer scheduled service to Havana. "But even with the opening of those routes, the trade embargo still bars U.S. citizens from visiting Cuba for tourism, though thousands of Americans have traveled there on loopholes that allow trips for educational, humanitarian or religious reasons," Jennifer reports. "And advocates for lifting the embargo are hoping the start of air service will advance efforts for freer travel between the two countries."

Photos at the airports (@ReutersAero): A band plays at Fort Lauderdale - Hollywood International Airport (@alangomez): Foxx shakes hands with José Ramón Cabañas, Cuba's ambassador to the United States (@JoseRCabanas): Foxx comes off the plane (@alangomez):

Let's not forget: Some Republicans in Congress say the administration has allowed commercial flights to begin too soon, without properly evaluating security procedures at Cuban airports. Expect Reps. John Katko of New York and Richard Hudson of North Carolina to keep airing concerns about that.

DRONE RULE IN FULL FORCE: The FAA's regulations for drones weighing up to 55 pounds went into effect last Monday, with thousands of aspiring commercial operators already signing up to take certification tests. Our Jennifer Scholtes had a rundown of the rules, which require "flying within line of sight, during daylight, away from other aircraft, less than 400 feet off the ground and under 100 miles per hour." Implementing the regulations will be a huge task for FAA. As Jennifer reported for Pros: "Embarking on what appears to be the most wide-reaching certification process in aviation history, the pool of interested pilots - and, in turn, the FAA's workload - will be more massive than anything the agency has ever fielded all at once."

Dozens of waivers and counting: The day the rules went into effect, FAA issued 76 waivers to drone operators across the country. The agency waived the daylight operation rule for most of the applicants, yours truly reported for Pros. Others secured waivers to fly over people and beyond the line of sight.

What's to come: The Drone Advisory Committee, chaired by Intel CEO Brian Krzanich, will meet Sept. 16. Members of the committee include reps from ALPA, Facebook, American Airlines, Amazon, UPS, AT&T and Google X. FAA plans to propose a rule on flying over human beings in December. It expects to release a proposal on other expanded operations next summer. Then the agency hopes to have a framework for long-distance flying and rules for package delivery.

YOU SHALL NOT PASS (68 MPH): NHTSA and FMCSA proposed a rule Aug. 26 requiring new heavy-duty vehicles to have devices that limit their speeds, our Lauren Gardner reported for Pros. The agencies are considering capping speeds for trucks and buses that weigh over 26,000 pounds at 60, 65 or 68 miles per hour. But they'll consider other speed limits that are suggested in public comments. Industry and safety groups had mixed responses to the proposed rule.

NTSB TAKING A LOOK AT DEADLY TAKATA-RELATED EXPLOSION: A truck transporting Takata airbag inflators got in a crash, caught on fire and exploded late last month in Texas, leaving a woman dead. NTSB is deciding whether a federal investigation into the accident involving ammonium nitrate is merited. The agency said "initial indicators are that the materials were packaged properly." Democratic Sens. Ed Markey of Massachusetts and Richard Blumenthal of Connecticut are calling on NTSB to launch its own investigation.


- Volkswagen to take big stake in Navistar. The Wall Street Journal.

- EU to help consumers against Volkswagen. POLITICO Europe. Plus: Porsche cars first to be recalled over emissions device. POLITICO Europe.

- Hanjin's creditors ready to provide $90 million in funds: government officials. Reuters.

- GM settles next federal ignition-switch cases set for trial. Bloomberg.

- Fewer breakdowns, but more lateness reported in Washington Metro's latest report card. WAMU 88.5.

- Satellite owner says SpaceX owes $50 million or free flight. Reuters.

THE COUNTDOWN: DOT appropriations run out in 23 days. The FAA reauthorization expires in 388 days. The 2016 presidential election is in 62 days. Highway and transit policy is up for renewal in 1,488 days.


10:30 a.m. - The National Academies of Sciences, Engineering and Medicine's Transportation Research Board kicks off a two-day committee meeting focusing on a study of the Interstate Highway System. FHWA Administrator Gregory Nadeau will speak about expectations for the study. National Academy of Sciences Building, 2101 Constitution Ave., Room 125.

Did we miss an event? Let MT know at

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POLITICO Pro Q&A: Shoshana Lew, DOT's chief financial officer and assistant secretary for budget and programs Back

By Ben Weyl and Lauren Gardner | 08/22/2016 02:05 PM EDT

Even as the Obama administration winds down, the Department of Transportation remains busy. After years of short-term patches, Congress passed a 5-year, $305 billion transportation bill last year known as the FAST Act, which the department is now implementing. With that in mind and with end of the fiscal year in sight, POLITICO spoke with Shoshana Lew, the DOT's chief financial officer and assistant secretary for budget and programs.

"From a technical budgeting perspective, I would boast that we have one of the most interesting budgets in the federal government," Lew said in a recent phone interview, noting that the department oversees a complex combination of trust funds and general funds to support the nation's roads, bridges and transit systems.

Lew is also keeping a close eye on the appropriations bills moving through Congress - bringing her nearly full circle to her time at the beginning of the Obama administration, when she worked in the Office of Management and Budget. Before arriving at the DOT in 2013, Lew worked on energy and climate change policy at the White House Domestic Policy Council and as a senior adviser in the Interior Department's Bureau of Ocean and Energy Management.

Below is a transcript of the interview, which has been edited for length and clarity.

The spending bills produced by the House and Senate Appropriations committees for fiscal 2017 provide several billion dollars less than what the administration requested. Are there specific areas that you're concerned Congress is underfunding?

We can't comment specifically on the 2017 package. What I can say is that the levels that are being contemplated in the bills that we've seen for fiscal year '17 are roughly consistent with what we've seen for fiscal year '16 and the actual appropriations bills. Generally speaking, the FY16 funding levels are adequate to maintain the current programs with some modest funding increases in areas like transit.

I think something positive about the FY16 bill is it did provide consistent funding aligned with the FAST Act. One of the functions that our appropriations bills play is in addition to providing for the discretionary funding, they provide what is called obligation limitation, which essentially enables us to spend out of the Highway Trust Fund at the levels that are authorized in our authorization bills and the FAST Act. Those were aligned, so that allowed us to spend against the FAST Act levels. In total what that gets with obligation limitation and discretionary is about $76 billion across the department.

It was important to us to have both through the FAST Act and appropriations bills predictable funding streams. But as you say, it's sort of not consistent with the levels this administration has consistently requested. If you look at our FY17 budget we're requesting more along the lines of $98 billion. What accounts for that difference is largely a package we call the 21st Century Clean Transportation Plan. It's our blueprint for not just the programs that we have today but thinking differently about what those programs are going to need to look like moving forward, and as we take the communities into the 21st century in a way that accounts for both where populations are moving and choices that we want communities to be able to make to have clean air and more accessible choices. Our secretary feels strongly that those are one in the same.

When it comes to that plan, I understand it was part of the budget process and that always comes at a certain time year, but it ended up coming two months after Congress passed a five-year highway and transit bill. Why didn't you put forward those concepts sooner, while Congress was still considering how to pay for that package?

A lot in that package was not new. If you look at many of the specific proposals in there, there's a lot of relationship to what was in our GROW AMERICA Act, which was our surface reauthorization proposal that preceded the passage of the FAST Act. There are a lot of threads to the discussion that we've been very consistent on throughout. An example of that is the need for a stable and much broader scale of source funding for rail. Increases in transit that are at a different order of magnitude than what we typically see in the budget process. So there was a lot of consistency with some of the policy ideas.

I think the other piece though is that particularly in the year or so leading up to the FAST Act, it was a very tenuous situation. There were extensions that were providing communities really living hand-to-mouth in terms of being able to apply for the project that they needed, and part of our thinking was that at the point when we had the stability of a five-year package, that's exactly the moment to put out there the bold and ambitious ideas, take some time to germinate and to begin the conversation in a thoughtful way where there isn't a moment of panic ... while we're not at a moment where the month-to-month ability to maintain transportation programs is at stake.

How has implementation of the FAST Act gone so far? I imagine it's been helpful to have long term funding in terms of planning?

Oh yeah. I mean it is helpful both in terms of funding, in terms of being able to execute a specific grant program like the FASTLANE grants that we've been working to execute over these past months. It is, from our state and local partners' perspectives, a much more certain operating pattern to be in, to know what the funding stream is going to look like over the course of the year.

In addition to the money piece of the FAST Act, there were a number of very important programmatic changes that we're working in real time to execute. One that is extremely important to us has been the authority to stand up a new innovative finance bureau, which we're calling the Build America Bureau. It was a unique opportunity in the FAST Act to consolidate our financing and loan programs into one and to provide a center of excellence for infrastructure financing, building on a lot of work we had done to set up something that was smaller scale administratively before the FAST Act passed. We just actually did our ribbon cutting in the last month or so and have a new space at the Transportation Department that is up and running, so that's a good very tangible example of executing on a FAST Act reform.

There are a series of changes in the project delivery space that reinforce reforms that the administration had begun much earlier on permitting and streamlining the process, and we're working in real time to execute on that, too. Things like increasing the scale of our permitting dashboard, so I think we're seeing quick and very diligent implementation both on the funding side of that and in terms of the programmatic reforms.

The fiscal year ends Sept. 30, and Congress has not sent a single appropriations bill to the president's desk yet. Some lawmakers, mostly conservatives, say Congress should pass a continuing resolution through next March. Others still want an omnibus by the end of the year. What are the consequences for the DOT depending on what happens there?

I can't comment specifically. Broadly speaking, certainty in funding and operating programs helps agencies to operate with more certainty. It helps the project funders we deal with to operate with more certainty, but I'm not going to comment specifically on different durations and what they would do.

I imagine you've begun work on the fiscal 2018 budget. We're always somewhere in the budget cycle. Could you talk about what preparations you're doing there?

As a general matter, in a transition year, the budget process gets wrapped up in the transition process. I can talk a little bit retrospectively about how that played out in the beginning of this administration, because the first budget of this administration was one of the first actions that we took.

Yeah, would you talk a little broadly about how a transition affects things for the department and budgeting?

Because of the way that the annual cycle falls, the budget is typically one of the first things that happens in a transition year, after the transition. During the tenure of this administration, it was one of the first pieces that we put out.

I obviously can't comment with any specificity on what the next iteration of that would look like. The president has made clear that one of his top goals for this year is assuring the transition from the Obama administration to the next president. DOT is deeply committed to doing our part to make sure that that happens. At the same time, we have to stay laser-focused on completing this administration's agenda in the transportation space.

And is there anything else that you're working on that we should keep an eye on?

We see a lot of really good things going on right now at this moment in the administration, both in continuing to fund projects through programs like TIGER - we just made a round of TIGER awards - or in the regulatory space. We just rolled out a major rule for medium- and heavy-duty trucks earlier today.

There is a lot that is continuing to happen right now, and I think it is incumbent on all of us to keep going with momentum and passion for the things that we work on as long as we're here.

Kaitlyn Burton contributed to this report.


Senate aiming for early action on water infrastructure, Flint aid Back

By Annie Snider | 09/02/2016 05:58 PM EDT

The Senate is poised to take up a major water infrastructure package with aid for lead-ravaged communities like Flint, Mich., when it reconvenes next week, a move that could bolster Republicans' message that they can make Washington function ahead of a tough November election in which their majority is at risk.

Senate aides tell POLITICO that Majority Leader Mitch McConnell is expected to call up the $10.6 billion Water Resources Development Act as soon as Tuesday or Wednesday, but it remains to be seen whether Democrats will let him. While the bill enjoys strong support from both parties, Democratic Leader Harry Reid has threatened to hold it up until the parties reach a deal on other issues like Zika funding and government-wide appropriations measures.

"He says the first thing he wants to bring up is WRDA, and you know, that's an important piece of legislation for a lot of us - for one there's some money in there for Flint, and it's real money, not authorization like the rest of the bill. ... However, we're not going to move to that unless we have a pathway forward on some other stuff," Reid said on a press call Thursday.

The WRDA bill is a bipartisan measure from Senate Environment and Public Works Chairman Jim Inhofe (R-Okla.) and Ranking Member Barbara Boxer (D-Calif.). It includes $220 million in funding to address the lead-contaminated drinking water crisis in Flint and help other communities upgrade aging infrastructure. The core of the bill comprises a suite of provisions relating to municipal water infrastructure and authorizations for more than two dozen lock, dam, levee and ports projects across the country.

A manager's amendment and summary being circulated Friday afternoon and obtained by POLITICO includes a series of technical changes and relatively noncontroversial additions spanning the range of issues the bill touches upon.

The measure received broad bipartisan support when it was passed out of committee in April. Committee Democrats heralded the bill, particularly since it includes a number of lead provisions pulled from a Democratic benchmark bill from Sen. Ben Cardin (D-Md.).

The WRDA bill is also a major priority for Sens. Debbie Stabenow and Gary Peters, who have been trying for more than six months to win aid for reeling Flint. The Michigan Democrats agreed to sacrifice a prized Energy Department loan guarantee program for advanced vehicle manufacturing as a means of funding it.

A spokesman for Stabenow, who was on the call with Reid Thursday, did not respond to a request for comment about the senator's reaction to Reid's comments.

McConnell will almost certainly seek unanimous consent on a procedural agreement to smooth the bill's path on the floor, and it remains to be seen whether amendment votes would be part of such a deal. Asked about the schedule for next week, a McConnell spokesman said the only votes currently on the schedule are two procedural votes Tuesday related to Defense Department appropriations and Zika funding, which is attached to a military construction and veterans affairs spending bill.

It is unclear yet whether Democrats will agree to take up the WRDA bill next week.

The measure could also face headwinds from fiscally conservative Republicans over the Flint funding provisions, although it finally won the support of GOP Michigan Gov. Rick Snyder, who had previously stopped short of backing the aid bill.

"Governor Snyder is appreciative of any and all efforts at the federal level that will help the people of Flint recover from the water crisis," Ari Adler, a spokesman for Snyder, told POLITICO in an email Friday. He noted that the state has already pitched in $234 million and that "additional resources from the federal level would of course be beneficial and welcome."

A number of regional battles could also pose hurdles to the WRDA bill on the floor, including a long-running water war between Alabama and Georgia, whose senators have frequently sought to insert legislative provisions that could give their state the upper-hand in court.

Moreover, even if the measure clears the upper chamber, its fate in the House is in limbo. The House Transportation and Infrastructure Committee in May approved a much slimmer version of its WRDA bill, focused only on Army Corps of Engineers projects. Leaders in the House have shown little appetite for tackling Flint aid or related lead issues.

But seeing the bill to completion is a major priority for Inhofe and Boxer, who are in their final months of leading the EPW committee. Inhofe is term limited as committee chairman, and Boxer is retiring after this year.


Lawmakers due for update on Amtrak Gulf Coast service Back

By Lauren Gardner | 08/30/2016 03:07 PM EDT

Lawmakers returning from their summer recess will find some fresh paperwork on their desks next week: a progress report from the working group that's studying how to restart Amtrak's long-dormant Gulf Coast passenger rail service.

The Gulf Coast Working Group was tasked under the FAST Act with studying the options for restarting - and paying for - that rail service. But the group continues to negotiate with CSX over infrastructure costs that sources familiar with the discussions say the railroad had initially pegged at about $2 billion.

CSX delivered its cost and service modeling estimates to the task force earlier this month, leaving little time on the clock for haggling over the costs - which sources had anticipated would be much lower - before delivering the report to Congress by Labor Day as required.

For now, the update that the Federal Railroad Administration and its task force will send to Congress is mostly a status report on the information the group has gathered so far and what's coming up in the next few months as multiple layers of government analyze restoring the service that was shut down in the days before Hurricane Katrina hit in 2005.

And it appears that the biggest obstacle could be U.S. Coast Guard regulations giving boats the right of way over trains passing over scores of drawbridges that dot CSX's tracks along the coastline.

CSX's "order of magnitude estimate" accounts for the cost of building infrastructure upgrades - based on computer modeling - that permit the best Amtrak train performance while ensuring that marine vessels get priority over rail traffic, CSX spokeswoman Melanie Cost told POLITICO.

Even with all those considerations, she said, the model could only produce an on-time performance rate of 67 percent - a figure that's well below the threshold that would allow Amtrak to lodge a complaint against the freight railroad for delaying its passengers.

"A substantial decrease in the number of improvements, and in turn necessary funding, could be realized if the model was no longer required to mitigate delays due to drawbridge openings," Cost said.

Working group members are optimistic they can reach a deal with CSX to shrink the costs significantly, saying the freight railroad has been a constructive partner throughout the process.

"Our resolve to do it is still there," said Knox Ross, a member of both the Southern Rail Commission and the working group.

Right now, officials in Washington from Capitol Hill, FRA and Amtrak are sorting through CSX's suggested upgrades to determine which are necessary to make the service a success, which are ideal but could be done at a later date, and which may not be needed if tweaks can be made to the railroads' operations.

"Any effort to put a price tag on this project before the Working Group completes its assessment of the required infrastructure would be more of a wild guess than a responsible estimate," FRA's Matthew Lehner said on behalf of the working group.

CSX tasked consulting firm HDR with modeling the capacity and infrastructure additions that CSX would need to build in order to enable up to four Amtrak trains per day to travel between New Orleans, Mobile, Ala., and Orlando in a way that won't constrain the modest projected freight growth rate that DOT estimates at 2.4 percent overall out to 2040.

The HDR model layered in new infrastructure needed to achieve certain levels of on-time performance based on assumptions about how often the drawbridges may need to open, train speeds and the amount of time that trains would need to idle at station stops.

The model prioritized passenger trains over freights as required under federal law, but it simulated perfect weather conditions and based the Amtrak trains' on-time performance on their arrival at route endpoints, rather than at all stations along the route, as recently decided by the Surface Transportation Board. CSX is among the railroads challenging that final rule, which came out just days before HDR employees presented their findings to the working group.

Perhaps most pressing of CSX's concerns was the effect the region's myriad drawbridges would have on on-time performance, with one HDR official calling them "probably the single biggest impediment to achieving operational reliability and on-time performance."

Coast Guard regulations require railroads to open bridges on demand for marine vessels; freight trains slow down as they approach openings so they can stop at a moment's notice, and Amtrak trains would have to do the same. If each drawbridge along the route were to open in front of an Amtrak train traveling from New Orleans to Jacksonville, Fla., they would add about three hours to each trip, HDR's Matt Van Hattem said at an Aug. 11 working group meeting at CSX headquarters in Jacksonville.

That Coast Guard mandate is built into CSX's schedules, but its impact is trickier when it comes to making sure Amtrak trains run on time - a responsibility the freight railroad would share in this scenario under federal law. CSX allows eight to nine hours to make the 145-mile trip between New Orleans and Mobile to account for unexpected delays along the way.

"That's not acceptable if you can jump into an automobile and do it a lot faster as a passenger," Jay Westbrook, CSX's assistant vice president for passenger operations and a working group member, told POLITICO before the meeting.

At the Jacksonville meeting, some participants questioned whether the drawbridges would present a serious problem, noting that they existed when Amtrak previously operated in the region through the mid-2000s. One Amtrak employee said trains had averaged one-minute delays in the 2004-2005 time frame due to drawbridge interruptions.

But that was also back when Amtrak used those tracks for its Los Angeles-to-Florida Sunset Limited long-distance route, which was plagued with delays and only ran three times per week each way, often pulling into stations in the area in the middle of the night.

"The proposed new Amtrak service is scheduled to operate during daylight or early evening when many more commercial vessels are passing through the drawbridges," CSX's Cost said. "It is understandable why Amtrak and the other stakeholders prefer daytime service to appeal to more riders, but a train operating during the traditional working hours of the day will see far more drawbridge activity."

Cost also noted that Amtrak conductors register delays based on the conditions they see at the moment rather than the root cause, meaning drawbridge delays during the Sunset Limited's run may have been attributed to other factors. The average drawbridge delay registered by Amtrak conductors between Jan. 1, 2003, and July 26, 2005, was 15 minutes, Cost said.

Congressional aides are working with the Coast Guard to better understand its drawbridge regulations. Because most of the route involves a single track in each direction, the model spit out new capacity upgrades - like areas called "sidings" where trains can pull over to let faster ones pass - that jack up the costs, one aide said.

So now government and Amtrak officials are taking what they've learned to the Coast Guard - which hadn't been involved in the working group's work up until now - to see if things like better scheduling practices by CSX and the military branch or advanced notification of marine traffic patterns could help mitigate the need for pricey infrastructure upgrades.

"The Amtrak experience seems to indicate that it was not nearly as significant a problem to the passenger rails as CSX finds it to be, so there's probably a middle ground there," said Southern Rail Commission Chairman Greg White, a working group member.

Signaling capabilities and grade crossings are also issues along the route, which contains significant stretches of "dark" track without centralized traffic control or positive train control, mostly across the Florida Panhandle. Amtrak is also studying what minimum requirements stations along the route must meet, such as Americans with Disabilities Act mandates, in order to handle service.

But for now, the drawbridge conundrum appears to be the working group's biggest challenge - especially in light of the STB's final on-time performance rule.

"Now we're contemplating the addition of passenger trains that have their own set of federal regulations that are in direct conflict with the Coast Guard regs," Westbrook said. "I don't see how you solve the problem."


With the feds no closer to an answer, states to test out VMT fee Back

By Tanya Snyder | 09/06/2016 05:03 AM EDT

Those who pull the levers of power in Washington, D.C., seem no closer to figuring out how to fix the Highway Trust Fund's revenue problem, but a small grant program in the last transportation bill does open the door a crack by funding several pilot programs to test vehicle miles traveled as a gas tax replacement.

Last week, the FHWA awarded its first eight grants under this program, created by the FAST Act. And though the grant program was open to any user-fee-based option, all of the program's grantees are experimenting with variations on a VMT fee.

As vehicle fuel efficiency improves and gas tax receipts decline, a VMT fee has long been considered as a way to ensure all drivers pay to maintain transportation infrastructure, regardless of their car's gas mileage - or whether it even uses gasoline at all. But a VMT charge is far from ready for a large-scale roll-out, with concerns over technology, privacy and fairness issues especially for rural America - and so official Washington remains hands-off. At least, for now.

At a House Ways and Means Committee hearing on transportation funding last year, Robert Poole of the Reason Foundation told then-Chairman Rep. Paul Ryan (R-Wis.) that it would take "probably close to a decade of pilot projects and experiments at the state level" before a VMT fee could be a viable alternative to the gas tax.

"We're nowhere near there," Poole said. "And I think if Congress tried to impose a federal [per-mile tax] in the next year or two, you'd risk a huge fiasco and tremendous backlash from the motoring public."

That may be, but some state officials wish the federal government would try just a little harder.

"A national policy could set up a regulatory framework that requires a foundational level of interoperability [for road charges]," said Reema Griffith, executive director of the Washington State Transportation Commission. "Many states were hoping Congress would enact something like that. But clearly that's not going to happen anytime soon, which is why you have a lot of states jumping ahead and saying, 'We're going to do something anyway.'"

Even if the idea isn't ready for prime time inside the Beltway, funding these pilot programs is at least an acknowledgment that states may be the best test-bed.

And the states working on a per-mile road charge have a lot of thorny issues to work out.

For instance, there are problems with revenue collection - there's virtually no way to make it as efficient as the gas tax. And, there are challenges related to interoperability, related to ensuring the right state gets paid when people cross borders.

But public squeamishness and the surrounding politics of privacy, as Poole suggested, are the biggest obstacles to transitioning to a new VMT fee system.

Those are the sticking points FHWA hopes states will find a way to resolve. The agency made it clear they weren't interested in research; they want wheels-on-the-ground demonstration projects. That's what the $14.2 million in grants will be funding in California, Delaware, Hawaii, Minnesota, Missouri, Oregon and Washington state. The program has $80 million left to disburse over the next four years.

Of course, two states have VMT charge programs in place already. California launched a limited road charge pilot in July, but Oregon is the only state that has implemented it on a permanent basis - albeit on a small scale. Its road charge program is all-volunteer, and while it can accommodate up to 5,000 drivers, so far only 1,263 have enrolled.

With its new FHWA grant, Oregon hopes to improve how they process manually reported road charges and explore up-to-the-minute technology options for electronic reporting. But, according to Michelle Godfrey of Oregon's Road Usage Charge Program, "the most important thing is public acceptance." So some of the funds will support Oregon's public education around road charges.

Seeking to mitigate privacy concerns, Oregon has implemented some strict rules on how data will be handled and stored.

But while privacy concerns have eased somewhat in Oregon, and 75 percent of road charge program participants have opted for electronic reporting, other worries persist - for example, that a road charge is unfair to rural residents.

And even once the public is on board, experts agree a new system would have to be rolled out incrementally. "You can't do it all at once," Godfrey of OReGO said. "That would be too dramatic and really challenging, both from a business perspective and from a public acceptance perspective."

Godfrey said the trick is figuring out how to start. "Do you choose to apply it only to vehicles that are high MPG that currently are not paying very much?" she said. "Or do you apply it only to new vehicles, say model year 2016 or later? Or do you apply to it only to parts of the state?"

Another challenge, Griffith added, is that states can't always just "unplug" the gas tax because they bond against it.

"We're pretty heavily leveraged on the debt side," she said. "We've got those obligations."

That means states trialing VMT charges will likely run two parallel systems for a period of time. For now, Oregon issues a credit for taxes paid at the pump to volunteers in the road charge program.

Oregon is shepherding a second FHWA grant, too - this one to explore interoperability issues around the VMT charge with several other states in a regional consortium.

For the first time, Oregon will actually execute cash transfers with Washington state - not just on paper but in hard currency - to troubleshoot any Treasury regulations that pose a problem. Washington will also be conducting the first international interoperability study with British Columbia, which is also experimenting with road charges. And Delaware DOT got a grant to work on interoperability of road charges up and down the I-95 corridor.

Interoperability isn't a problem in Hawaii, which got the biggest grant of all to work on systematizing fee collections during safety inspections. The Aloha state mandates annual safety checks, which makes non-electronic reporting based on odometer readings relatively simple. Washington state is trying to figure out how to fraud-proof self-reporting for a state that doesn't require annual checks. They're looking into a way to "fingerprint" each car so they can tell the picture you send in of your odometer is really yours.

Washington state will also conduct a focus test on electronic vehicle drivers to determine how a road charge might impact driver behavior or interest in electric cars.

States have another four years to trial VMT fees and come up with some best practices and information on public acceptance before the FAST Act expires and lawmakers will again be confronted with the question of how to pay for a replacement bill.


U.S. starts flights to Cuba, but travel restrictions remain Back

By Jennifer Scholtes | 08/31/2016 12:40 PM EDT

President Barack Obama's transportation chief made a symbolic trek to Cuba on Wednesday as a passenger on the first commercial flight to the Caribbean island in five decades, the latest step by the administration to rebuild the relationship with the U.S.' former Cold War enemy.

Transportation Secretary Anthony Foxx's trip on a JetBlue flight from Fort Lauderdale, Fla., to Santa Clara, Cuba, will restart the flow of transit between the two nations for the first time since the 1963 missile crisis - even though travel restrictions on U.S. citizens and a trade embargo remain in place. Foxx is expected to announce the final authorizations Wednesday afternoon for the initial direct flights between Cuba and the United States, and airlines have scrambled to secure permission for dozens more.

But even with the opening of those routes, the trade embargo still bars U.S. citizens from visiting Cuba for tourism, though thousands of Americas have traveled there on loopholes that allow trips for educational, humanitarian or religious reasons. And advocates for lifting the embargo are hoping the start of air service will advance efforts for freer travel between the two countries.

"As more and more Americans visit our island neighbor and talk to everyday Cubans, the more Americans will see that the embargo is just an outdated relic of the Cold War era," James Williams, president of the group Engage Cuba, said this week. "We hope that as U.S. travel to Cuba continues to skyrocket with scheduled flights, momentum will only continue to grow for Congress to pass the Freedom to Travel to Cuba Act."

This latest step in normalizing relations comes after President Barack Obama began using his executive authority nearly two years ago to rebuild diplomatic ties with Cuba.

And although there has been little indication that Congress will act to remove the long-standing trade embargo anytime soon, the legal details don't mean much now to Americans who will be able to hop aboard flights to the island on eight different U.S. airlines for less than the price of many domestic tickets.

For its part, JetBlue is trying to simplify the process for fliers seeking to navigate the legal restrictions on trips to Cuba - touting its "affidavit in a few clicks" system that allows customers to use the airline's booking system to vow they will qualify for one of 12 Treasury Department-approved reasons for travel. The airline is also including Cuban government-required health insurance coverage for all travelers on Cuba-bound flights and making Cuban tourist visas available for purchase upon check in.

The Department of Homeland Security announced in early August that Cuba had agreed to allow the U.S. to put air marshals on the flights. But several congressional Republicans are still raising concerns about the security procedures currently in place at Cuban airports, arguing that the foreign ports have insufficient passenger screening technology, inadequate vetting of airport and airline workers, and poorly performing bomb-sniffing dogs.


A new day dawns for drones - along with a massive task for the FAA Back

By Jennifer Scholtes | 08/29/2016 05:50 AM EDT

The FAA's long-awaited rule enabling commercial use of small drones may be done, but the rulebook is just now being written - starting Monday.

Beginning this week, the agency will start processing waivers using its newly minted authority, setting precedent for the types of operations that can operate outside the underlying rules for devices that weigh up to 55 pounds. Primarily that requires flying within line of sight, during daylight, away from other aircraft, less than 400 feet off the ground and under 100 miles per hour.

Embarking on what appears to be the most wide-reaching certification process in aviation history, the pool of interested pilots - and, in turn, the FAA's workload - will be more massive than anything the agency has ever fielded all at once. As of the latest count, more than 3,300 aspiring drone fliers had signed up to take certification tests before the rule had even gone into effect, and more than 20,000 commercial operators had registered their drones.

"We're relearning kind of the dawn of aviation," Earl Lawrence, who heads the FAA's drone integration office, told congressional aides last week. "The number of stakeholders has increased tremendously. ... And we know we're just beginning on this path. We're not done."

The FAA's move to give clear instructions for legitimate commercial drone operations comes as a long-awaited boon for Silicon Valley giants like Amazon and Google, agribusiness and energy interests, as well as the thousands of smaller companies that are dabbling in drone use in their shadow. Businesses have pushed ahead with innovation in this field without much of a regulatory roadmap - until now.

Among the business community, in contrast to the usual allergic reaction to prescriptive federal rules, drone outfits are heralding the new framework as a much-needed certainty that will lead to widespread use and rev up the economy.

"You look at some of the numbers the FAA is talking about, and they show really the strength of interest among those who would just be early adopters," said Adam Lisberg, a spokesman for drone manufacturer DJI. "As big as the first-day demand is shaping up to be, it's really just the tip of the iceberg of how drones are, in the next few years, going to be a regular and accepted part of government, farming, business, education and all sorts of other professions in business life."

Now that thousands of industry vanguards have already applied to legitimize their drone operations, he says, the masses will follow.

"If you're a roofing contractor in a town somewhere, you probably don't expect that every roofing contractor is going to want to get a drone on the first day," Lisberg explained. "But as soon as one of them gets one and is able to do reviews and inspections much more quickly and much more safely than before, it's only a matter of time before the others are going to want to take advantage of that, too."

For its part, the FAA has tried to make the registration, testing and waiver processes as user-friendly as possible, setting up a front-end system of simple Internet forms. But processing that information is expected to be a wonkier, more labor-intensive endeavor until the agency develops a more automated system.

"Behind the scenes, it's the typical bureaucracy," Lawrence has conceded to legislative staff. "If we get 200,000 people asking for a waiver on day one, it's going to take us a little while to get through that, because we will be doing it on a manual basis and analyzing each one, and working our way through that."

Once the FAA has handed down those first major waiver rulings, though, the process will likely get easier for both drone pilots and the FAA employees tasked with making the exceptions. That was the case with the previous framework - as the FAA began granting exemptions, it was gradually able to exempt more companies in one stroke.

The earliest wavers are expected to be those to outfits that want to fly drones beyond line of sight to cover farm crops, those that want to fly at night if their devices are adequately equipped with lights and those that want to fly over people if their machines are made of foam or otherwise deemed safe.

So other operators can see how those "on the cutting edge" are able to get waivers, the FAA will be making its approval decisions public online, with information on how the operators propose to mitigate safety concerns.

"So hopefully we won't be totally overwhelmed with waivers and people will learn fairly quickly what can be authorized and what is really out of the box," Lawrence said.

The process sounds straightforward enough, but the volume of interested drone pilots has already caused major issues for the agency, which had to postpone an online seminar for law enforcement officials last week because so many people tried to participate.

"We already have twice as many unmanned aircraft registered than manned aircraft - easily. ... So that volume is something we're having to get used to," Lawrence said. "As we're seeing more uses, everybody wants to use one of these things."

While FAA officials have been reluctant to quantify the workforce resources that will be devoted to carrying out the new rule, they have said "hundreds of FAA employees across the country are involved" in its implementation.

Leaders in the drone industry see the potential workload issues and any resulting delays as a good problem to have - a testament to the tremendous demand and desire to safely operate drones within the bounds of federal law.

"This is symptomatic of how many people want to use this technology, how many different industries will benefit from the technology, even beyond industry - to science and research to law enforcement and public safety," said Brian Wynne, president and CEO of the Association for Unmanned Vehicle Systems International.

While FAA officials are working to enforce this latest rule for small drones flown by non-hobbyists, the agency will also be looking to move forward with other regulations to permit more complicated drone operations.

In December, the administration is expected to propose a rule on operating drones over people. Next summer, the agency plans to put out another proposal on further expanded operations. After that will come a framework for "non-segregated" drone use dictating the rules for flying across longer distances. And last will come regulations for package delivery.


FAA grants 76 waivers to drone operators, mostly for nighttime flying Back

By Brianna Gurciullo | 09/01/2016 04:43 PM EDT

FAA released the list of 76 waivers it issued to drone operators on Aug. 29, the day its new regulations for small drones went into effect.

For the vast majority of applicants, FAA waived the rule that devices must be flown in daylight. It's also allowing CNN to fly over human beings after finding that the network established "adequate mitigations for risks involved" in operating over people. The waivers will last four years and 19 went to individuals instead of companies.

PrecisionHawk, a company that collects geographical data using drones, received a waiver to operate drones beyond the line of sight because the company proved that its "remote pilots and visual observers will always be able to see and scan the airspace encompassing" the drone's working area.

BNSF Railway Company was authorized to fly drones over its property at night, beyond the line of sight and when weather reduces visibility. Intel Corporation got permission to fly multiple drones during the day or night within certain areas, as long as it gets additional approval from the Air Traffic Organization.

FAA had said that it would publish its approval decisions online so other drone operators could see how those "on the cutting edge" got their waivers.


DOT proposes speed limiter mandate for new heavy vehicles Back

By Lauren Gardner | 08/26/2016 11:22 AM EDT

NHTSA and the Federal Motor Carrier Safety Administration today proposed a new rule that would require new heavy-duty vehicles to be equipped with devices that can cap their speeds - months after appropriators renewed their call for regulators to act.

The two agencies are proposing mandating that trucks and buses weighing more than 26,000 pounds utilize speed limiters that would be set to a maximum speed. The agencies weighed the benefits of setting the limit to 60, 65 or 68 miles per hour in the rule but will consider other speeds during the public comment period.

"This is basic physics," NHTSA Administrator Mark Rosekind said in a statement. "Even small increases in speed have large effects on the force of impact."

NHTSA is also considering whether it should require companies to retrofit their heavy vehicles with speed limiters, or if it should only extend the regulation's requirements to those trucks, buses and the like already outfitted with the devices.

In April, Senate appropriators included report language in their fiscal 2017 spending bill directing regulators to propose the rule. Sen. Susan Collins (R-Maine), chairwoman of the Appropriations panel in charge of transportation spending, has criticized DOT for slow-walking the rule, which had been sitting at the Office of Management and Budget since May 2015.


Speed-limiter proposal draws praise, scorn from interest groups Back

By Lauren Gardner | 08/26/2016 02:40 PM EDT

Trucking and safety advocates gave a mixed reaction to federal regulators' proposal today to mandate speed-limiters on heavy-duty trucks and buses.

The Owner-Operator Independent Drivers Association, which represents small-business truckers, said the technology could work against drivers by preventing them from accelerating to avoid an accident.

"Highways are safest when all vehicles travel at the same relative speed," said Todd Spencer, the group's executive vice president. "No technology can replace the safest thing to put in a truck, which is a well-trained driver," he added.

But the American Trucking Associations, which petitioned the feds for speed-limiter rules 10 years ago, praised the proposal.

"Speed is a major contributor to truck accidents and by reducing speeds, we believe we can contribute to a reduction in accidents and fatalities on our highways," said ATA President and CEO Chris Spear.

Meanwhile, Henry Jasny, senior vice president and general counsel for Advocates for Highway and Auto Safety, used the rule's release - which he dubbed "a modest advance for safety" - to ding NHTSA and FMCSA for dragging their heels on this regulation and others he says would counteract preventable truck crashes.

"Ensuring that commercial drivers are adequately trained before receiving a CDL, evaluating motor carrier companies on their basic fitness for operating commercial vehicles on our streets and highways, and preventing fraud by commercial drivers that use drugs and alcohol, are all essential safeguards for advance safety for commercial drivers and the public," he said in a statement.


NTSB seeks data on Takata-related truck explosion Back

By Jennifer Scholtes | 08/31/2016 03:03 PM EDT

As part of its effort to decide whether a federal investigation is warranted, the NTSB requested shipping documents and other information today related to the explosion last week of a truck carrying Takata airbag parts.

The safety board told POLITICO that "initial indicators are that the materials were packaged properly."

Because the ammonium nitrate explosion occurred in Texas, state officials will be first to investigate the accident. But NTSB investigators are ready to help if the state asks for federal assistance in that probe, the safety board said.

Sens. Ed Markey and Richard Blumenthal called this morning for the NTSB to open its own investigation into the deadly explosion, saying that "the recent tragedy in Texas raises questions about how many millions more are in harm's way because of Takata's practices transporting its hazardous product."


EU to help consumers against Volkswagen Back

By Saim Saeed | 09/05/2016 04:01 PM EDT

The European Commission will coordinate with national consumer protection authorities as the next step in its fight with Volkswagen, Vera Jourova, the consumer commissioner, said today.

While Volkswagen has pledged billions of dollars to compensate drivers in the United States, it has so far rejected calls for similar payments in Europe, where different legal rules weaken the chances of winning a payout.

In response, Jourova said the Commission will organize consultations this month to collect information from national consumer protection authorities on whether VW breached any rules, "which seems to be the case," she said.

Jourova outlined two European statutes, the Unfair Commercial Practices Directive and the Consumer Sales and Guarantees Directive, on which to base the Commission's case against Volkswagen.

"We now have received feedback from all member states and are analyzing it in detail," Jourova said. "According to this feedback, it seems that, in most countries, Volkswagen has breached EU consumer legislation. I am therefore determined to intervene in a coordinating role on the European level."

Still, Jourova was careful not to take an antagonistic line.

"It is not my intention to come with strong action without fair communication with the company," she said. "I cannot say I am going to take a stricter approach. I want them to look at the valid legislation and see what they have to do."

She promised to meet with VW representatives later this month.

This article first appeared on POLITICO.EU on Sept. 5, 2016.


Porsche cars first to be recalled over emissions device Back

By Kalina Oroschakoff | 09/05/2016 04:06 PM EDT

The German transport ministry said today that the country's transport authority has approved repairs to 10,500 Porsche Macan cars, part of a broader industry recall related to emissions issues that affects 630,000 cars across Europe.

The issue is cars equipped with devices designed to shut off exhaust-management systems when temperatures dip low enough to threaten engines.

These are not like the illegal defeat devices installed by Volkswagen, which were designed to cheat on emission tests - however there is concern that some adaptations to exhaust management systems may violate emissions rules.

That's because the devices in the Macan, a small SUV, have very generous "thermal windows," triggering a shutdown of the exhaust controls at a balmy 17 degrees Celsius. The recalled cars will have their management systems turn off at only 5 degrees.

The fix will also apply to all future Porsche models.

Audi, Mercedes, Opel and VW are also affected, the ministry said in April.

The ministry said the carmakers, whose models were approved in Germany, agreed in writing to "implement appropriate improvements as part of a service action."

Volkswagen had 2.4 million of its diesel engine cars recalled under a mandatory scheme.

This article first appeared on POLITICO.EU on Sept. 5, 2016.

Hanjin Shipping Bankruptcy Unlikely to Ease Glut of Vessels

The increasingly likely demise of one of the world’s biggest container-shipping companies may offer some short-term relief to a sector battered by a global downturn in trade. It also could hasten further industry consolidation.

What the collapse of South Korea’s Hanjin Shipping Co. won’t likely do is solve the shipping industry’s biggest problem: 30% more space on ships than cargo to fill it amid a world-wide trading slump.

As the Korean government signals it is steering Hanjin toward liquidation, that would make the Korean carrier the largest container-shipping failure in history by far, says shipping consulting firm Alphaliner.

The news sent tremors through an already reeling industry, based mostly in Europe and Asia. Within the space of a year shipowners have gone from ordering ships in droves to scrapping them, shipyards have been shrinking and the biggest companies have been forming alliances that share ships, networks and port calls to cut costs.

“Hanjin Shipping’s receivership filing brings to the surface the core the industry’s problem: An oversupplied market where too many ships fight for cargoes in a world where trade barely grows,” said Basil Karatzas, of New York-based Karatzas Maritime Advisors Co.

South Korea’s biggest shipping line, Hanjin Shipping Co., filed for bankruptcy protection on Wednesday as falling trade volumes claimed another victim. Shipping is one of the sectors in which South Korea is a global leader, so what does this recent collapse tell us about world trade? Photo: Getty Images

A jump in rates following Hanjin’s filing might give a fleeting breather to the more deep pocketed European operators like A.P. Møller-Maersk​A/S’s Maersk Line, CMA CGM SA and Hapag-Lloyd AG.

But Hanjin’s woes mean trouble for individual shipowners that lease to it, like Danaos Corp., Navios Maritime Partners LP and Seaspan Corp. Those three have a combined exposure of more than $1 billion to the Korean shipper, according to shipping executives.​

“Like everybody else we are still waiting to see what the final outcome of this case will be,” a spokeswoman for Navios said.

Hanjin is sparking fears among retailers in the U.S. and elsewhere during the busy holiday-stocking season. There could be “millions of dollars” of goods stranded, according to the National Retail Federation.

The Korean carrier moves 3% of containers globally and up to 10% of the ones shipped between Asia and Europe. But 61 of its 98 ships are chartered, not owned.

If Hanjin ends up liquidating its assets rather than restructuring, those ships will find homes with other carriers.

And while Hanjin’s bankruptcy filing sent spot shipping rates soaring—by as much as 40% on routes from Asia​to the Americas, according to Drewry Shipping Consultants Ltd.—those weren’t expected to stick. Starting in September Lars Jensen, chief executive of SeaIntel Consulting in Copenhagen said he expects the effect of the Hanjin filing on rates to be “minimal” and that rates will remain below sustainable levels.

The biggest initial hit could come to retailers in the U.S. and elsewhere waiting on goods for the holidays. Not knowing whether they would get paid, ports and handlers from South Korea to China, the U.S., Canada, Spain and elsewhere have refused to handle its cargo. That has stranded 45 ships at sea, according to the company, and more than half a million containers.

Berthing and unloading services for Hanjin ships resumed at South Korea’s main ports on Friday after the government said port authorities would guarantee payments for service providers. A Hanjin spokeswoman said the company also plans to take action in the U.S. and other countries, including filing for protection of assets, to prevent further seizure of ships.

Danaos has a $560 million exposure to Hanjin. Its chief operating officer, Iraklis Prokopakis, said he expects the Seoul court handling Hanjin’s receivership to rule later this month on the company’s charters.

“We will then have to decide whether we will recharter ships to another company and claim our damages from Hanjin, or continue with them at different freight rates which will likely be lower,” Mr. Prokopakis said. “So it’s a setback, but hopefully not a total disaster.”

Athletic gear manufacturer New Balance currently has “a significant amount of goods in transit with Hainjin and we are working through the details currently to get possession of the goods,” spokeswoman Amy Dow said.

“We are working with a number of organizations to keep the freight moving but this is very fluid,” Ms. Dow added.

But industry executives said any claims to Hanjin could take up to 10 years to be settled, and Mr. Prokopakis said if Hanjin is liquidated, “we won’t recover a substantial part of our claims.”

Seaspan didn’t immediately respond to requests for comment.

With goods stuck on its ships, Hanjin said Friday that it has been suspended from the alliance it belongs to, the CKYHE Alliance. Its Asian shipping partners are rushing to find alternative arrangements to ship electronics, clothing, furniture and other goods as retailers in the U.S. and Europe are stockpiling for the holidays and rivals are boosting freight rates.

The South Korean government has signaled that it sees no future for Hanjin Shipping, rejecting the idea of a merger and calling on its smaller domestic rival Hyundai​Merchant Marine Co. to buy healthy assets from the troubled firm.

The Seoul central district court has given Hanjin until Nov. 25 to submit a rehabilitation plan that will determine whether it can continue operating. Given the government’s stance, this is seen as granting Hanjin more time for an orderly liquidation.

“The court doesn’t want to stir chaos by ordering an immediate liquidation. But eventually Hanjin will be wound up,” said Lee Sang-jae, an analyst with Eugene Investment Securities Co.

The filing with the Seoul Central District Court on Friday came just two days after its creditors discontinued providing a lifeline after years of financial assistance failed to keep the company afloat.

The Feds Could Block the Road to the Driverless Car

Karl Benz’s 1886 Patent Motorwagen, considered the first production automobile, didn’t look much like today’s cars. It was modeled on horse-drawn carriages, though it lacked doors or a roof. The vehicle also had three wheels, not four, and a tiller rather than a steering wheel.

Cars have evolved dramatically since Benz introduced his invention at the end of the 19th century. Now, with fully autonomous vehicles only a few years from mass production, the automobile could become unrecognizable from past iterations. Change isn’t always easy, but regulators, business leaders and consumers should embrace this revolution, not fear it.

Last month CEO Mark Fields announced that Ford Motor Co. would mass produce driverless cars within five years. “There’s going to be no steering wheel,” Mr. Fields explained. “There’s going to be no gas pedal. There’s going to be no brake pedal.”

Other car makers seem less certain about shifting the driver from the driver’s seat—for now. Mercedes-Benz’s prototype self-driving car still has a wheel and pedals, and that’s a conscious choice, Daimler AG chairman Dieter Zetsche said last year. “The user of an autonomous Mercedes-Benz,” Mr. Zetsche said, “will always remain the decision maker.” That, he added, is “true independence.”

Car makers have already put driverless cars on the road at test facilities such as GoMentum Station in California and Mcity in Michigan. But for this technology to truly gain speed, with or without steering wheels, car makers need to be able to test their cars on all kinds of roads in various conditions.

The National Highway Traffic Safety Administration is in the process of drafting model state regulation. But in the absence of federal guidance, state regulatory policies run the gamut. California requires all cars on the road to have a licensed driver behind a steering wheel, as well as a brake pedal and accelerator. Legislators in Arizona and Pennsylvania are considering rules that would allow driverless cars to operate as intended, without drivers.

Yet even if businesses and regulators fully support driverless cars, these vehicles won’t become mainstream without buy-in from millions of consumers. If you have driven your own car for decades, it might be hard to give up control and trust a machine with your life. But some 90% of traffic deaths in the U.S. are caused by human error, according to NHTSA. Driverless cars wouldn’t even have to achieve perfection to save tens of thousands of lives.

Younger Americans get it. Drivers age 25 to 35 are three times as likely as those between 55 and 64 to want to replace their current vehicle with a completely self-driving car, according to a report from the Consumer Technology Association that will be released this month.

Elderly people and those with disabilities would also welcome the freedom of movement that driverless cars will provide. Steve Mahan, executive director of the Santa Clara Valley Blind Center, first used one of Google’s driverless cars to get around town in 2012. Millions of people could get the same opportunity in coming years.

Car transportation is on a path toward greater safety, increased efficiency, higher mobility and lower prices. Americans should resist government efforts, however well-intentioned, to make this transition more difficult. Instead of squashing experiments in the states, federal regulators ought to defer, allowing controlled markets like those in California and Michigan to grow. What happens there now will make its way into fully autonomous cars for the rest of us later.

Mr. Shapiro is president and CEO of the Consumer Technology Association.

Car Makers Scrutinized on Self-Driving Claims

A Mercedes-Benz magazine ad this summer described a new sedan as a “self-driving car from a very self-driven company.” On television, the Daimler AG luxury brand showed a prototype autonomous car with passengers facing one another before cutting to a current vehicle with limited automatic steering.

“Is the world truly ready for a vehicle that can drive itself?” asked the television commercial’s narrator, adding that the future had arrived, ready or not, with a “concept car that is already a reality.”

But there was a problem: The E-Class sedan both ads portrayed isn’t a self-driving car. Rather, it features technologies, such as Drive Pilot, that can initiate a lane change by activating the turn signal, and Active Brake Assist, which warns of an imminent collision and automatically brakes if the driver fails to act.

Mercedes-Benz pulled the television ad in late July in part to “avoid any potential confusion,” a company spokeswoman said. The move came soon after consumer advocates wrote the head of the Federal Trade Commission complaining that the commercial incorrectly portrayed a fully driverless car. Mercedes-Benz already had removed the “self-driving car” reference from the separate print ad after the fatal crash in May of a Tesla Motors Inc. electric car that was driving itself.

Auto makers developing automated-driving features are confronting concerns they are giving short shrift to the technologies’ limitations and leaving customers with a false sense of security. Since the Tesla crash, U.S. lawmakers, safety advocates and others have begun homing in on how car companies describe their autonomous-driving systems.

“These companies are in an arms race to get the technology out there and demonstrate they have superior engineering,” said Mike Nelson, a lawyer at Sutherland Asbill & Brennan LLP focused on liabilities stemming from automated driving. “For the manufacturers, they’re all exposed on duties to warn and consumer-protection laws for falsely advertising capabilities. There is a lot of potential for misuses and misunderstanding.”

Consumer Reports this summer said Tesla should stop referring to its automated-driving system as “Autopilot,” calling the label misleading and potentially dangerous since the Silicon Valley company’s vehicles aren’t fully driverless.

Tesla, which kept the Autopilot name and warns drivers the system doesn’t render vehicles autonomous, said it “is constantly introducing enhancements, proven over millions of miles of internal testing, to ensure that drivers supported by Autopilot remain safer than those operating without assistance.”

Tesla added it would “continue to develop, validate, and release those enhancements as the technology grows.” At the end of August, the company’s chief executive, Elon Musk, teased on Twitter that “major improvements to Autopilot [are] coming…primarily through advanced-processing of radar signals.”

Car makers and regulators say technologies such as automatic emergency braking, adaptive cruise control and assisted steering offer safety benefits and the potential to cut traffic fatalities that exceeded 35,000 in 2015 in the U.S. largely because of human error.

But customers remain skeptical, expressing strong desires for systems allowing them to retake control while being assured the technologies are flawless and safe, according to a survey conducted by AlixPartners LLP, a turnaround and consulting firm that advises auto makers.

Some customers concede placing outsize confidence in the technology despite fine print and other warnings from manufacturers. But even the most advanced systems available in dealer showrooms require drivers to remain engaged behind the wheel, rather than depend on computers to perform all driving functions.

The Mercedes-Benz television ad was already set to be replaced, but the auto maker retired it sooner “given the claim that consumers could confuse the autonomous driving capability of the…concept car with the driver assistance systems of our new E-Class,” a company spokeswoman said. The manufacturer all along stressed drivers should stay engaged, she said, adding the vehicle isn’t autonomous, “and we are not positioning it as such.”

An FTC spokesman confirmed that the agency received the letter highlighting the ad from groups including Consumers Union, the policy arm of Consumer Reports, and declined to comment further.

Presenting semiautonomous driving technologies concisely with all their breakthroughs and limitations is a challenge for auto makers competing to showcase systems, said Mark Wakefield, an AlixPartners managing director who advises car companies. “Describing what it does and finding one to three word descriptors for it is tough,” he said. Whatever the systems’ capabilities, fully driverless cars remain years away, he said. Cars for sale now can sometimes steer, accelerate and brake on their own, he said.

Google parent Alphabet Inc. is testing driverless cars that don’t require human interaction, but the vehicles aren’t dotting showrooms.

Volvo Car Corp. offers Pilot Assist on some cars, part of a group of features dubbed Intellisafe. General Motors Co. is developing a Super Cruise automated-driving system for Cadillacs, though the rollout was delayed.

In a July letter, Senate Commerce Committee Chairman John Thune, a South Dakota Republican, told Tesla’s Mr. Musk it was “essential to use lessons learned from” the fatal crash in Florida involving Autopilot “to improve safety technologies, ensure they perform as advertised, and make certain that consumers are properly educated about their use.”

In response, Tesla in late July told congressional staff that the benefits of automated vehicle systems outweigh the risks, said a person familiar with the meeting. Tesla representatives added that cross-traffic conditions such as those involved in the May fatal crash are a “heightened challenge” for automated-driving systems and that motorists need to exercise caution.

Automatic emergency braking sensors failed to detect the white side of a tractor trailer against a bright sky when it turned in front of a Tesla Model S, so the car failed to brake and collided with the truck, according to Tesla. Mr. Musk has said he plans to forge ahead updating Autopilot and further educating customers on its capabilities and limitations.

While proclaiming the system the most advanced on the road, Tesla warns drivers it doesn’t render vehicles fully driverless and motorists must remain engaged behind the wheel.

Logistics, Transport Hiring Soared in August

Logistics and transportation companies added 14,900 jobs in August, the U.S. Labor Department said Friday, extending strong hiring growth for a second month despite reports of low shipping volumes and manufacturing activity.

Warehousing and storage companies led the surge, adding 4,300 jobs to its steady incline as online shopping growth fuels demand for more workers to package and ship goods. Distribution centers have added more than 48,000 jobs in the past year. Courier and messenger companies, which also benefit from the e-commerce boom, added 4,000 jobs in last month and have expanded employment by 22,600 jobs over the past year.

Industry consultants say companies in industries close to e-commerce have been hiring earlier than usual in anticipation of the annual crush of shipments for the holidays as a tighter job market and rising wages in other sectors have created more competition for workers.

Trucking firms, which shed jobs for most of the first half of the year due to weak demand, added 3,400 jobs in August after adding 1,700 jobs in July. Even rail transportation jobs saw some relief, adding 100 jobs in August after cutting over 24,000 of jobs over the last year amid a steep decline in coal and energy shipments.

The growth in logistics industries came as the overall job market expanded by 151,000 jobs last month, slower than the 270,000 jobs added in both June and July, and short of economists’ expectations. But the added jobs come as other indicators call for caution for the transportation industry.

Imports at major U.S. ports have been flat going into what should be a late summer peak, and reports earlier this month indicated domestic U.S. shipments by rail and road remained weak through July, with spending in shipping decreasing as well.

Old Dominion Freight Line Inc., one of the largest trucking firms in the U.S., said Friday that less-than-truckload shipments, in which shipments from multiple customers are carried on the same trucks, declined by 1.5% in August from the same month last year. ODFL Chief Executive David Congdon said the carrier saw “an operating environment that continued to be challenging.”

The Institute for Supply Management said Thursday that U.S. manufacturing activity—a significant source of demand for trucking companies—contracted in August. Manufacturers slashed 14,000 jobs in August, reversing some of the sector’s gains in recent months. Goods-producing industries overall cut 24,000 jobs for the month.

“This month brings more manufacturing jobs losses, including in the automotive sector, where sales are declining. That’s been a recent bright spot for U.S. manufacturing, and its slump really highlights the global headwinds America is facing,” said Scott Paul, president of the Alliance for American Manufacturing.

Presidential Campaigns Leave America’s Mayors Frustrated

Donald Trump will make a rare campaign appearance in an inner-city setting on Saturday as his presidential campaign works to cut into Democratic rival Hillary Clinton’s significant advantage among black voters.

Yet while Mr. Trump is addressing the congregation at Great Faith Ministries International in Detroit, other urban constituents are listening for clues about his plans if elected: the nation’s mayors.

Leaders of the largest U.S. cities say they are increasingly disappointed in the presidential choices. Democrats question how their party’s nominee will deliver her campaign promises, while many GOP mayors still refuse to pick sides in the race as they are caught politically between their urban constituents and their party’s controversial nominee.

Tulsa, Okla., Mayor Dewey Bartlett lost his bid for a third term in June after he said he would vote for Mr. Trump, while his opponent, fellow Republican G.T. Bynum, refused to make his presidential pick public.

“It was portrayed as if I endorsed Trump. I never did, but it’s a fine line,” he said in an interview. “It probably did hurt.” Lloyd Wright, Mr. Bartlett’s press secretary, was less nuanced: “It just killed him.”

As Mr. Trump and Mrs. Clinton trade charges of bigotry and racism, mayors say the contest has become too personal, with not enough attention focused on the challenges facing voters in cities. In interviews with nearly 20 mayors, leaders said they want to see more detailed plans to rebuild roads and bridges and improve public schools, and hear how the candidates plan to break Washington gridlock.

The frustration comes as local leaders increasingly view cities as the nation’s economic engine. Municipalities account for 91.3% of wage income in the country, and 90.8% of the nation’s economic output, according to a June report from IHS Global Insight. Last year, more than 96% of all news jobs were created in cities, the report showed.

“I’m not publicly supporting either candidate at this point,” said Betsy Price, a GOP three-term mayor of Fort Worth, Texas. “I don’t think either one of them are taking in the fact that 85% of our citizens now live in cities, and they ought to be talking to city leaders.”

“They’re creating a nation where people are afraid and disgusted and don’t trust their elected officials,” Ms. Price said. “And that’s not the case at the city levels.”

Dismay among mayors seems more troublesome for Mr. Trump, who is backed by just 15% of nonwhite voters, according to an Aug. 25 poll by Quinnipiac University. He met with African-African voters Friday at a Baptist church in Philadelphia to improve his standing.

Among the 15 GOP mayors leading the largest U.S. cities, two said in interviews or published reports they would support their party’s nominee: Mr. Bartlett, who leaves office in December, and Jacksonville, Fla., Mayor Lenny Curry.

Mr. Curry, who declined an interview request, referred to his support of Mr. Trump as the “elephant in the room” at a town-hall meeting last month with predominantly African-American residents, according to the Jacksonville Times-Union. He is a former chairman of the Florida Republican Party.

Gaining their support could help Mr. Trump, as mayors’ political organizations can help drive voters to their polls.

Yet Mr. Trump, unlike recent Republican presidential nominees, declined repeated invitations to address the U.S. Conference of Mayors, headed this year by Mick Cornett, the Republican mayor of Oklahoma City.

Mr. Cornett was one of three current or former mayors to address the Republican National Convention this year; the other two were former New York Mayor Rudy Giuliani, who is one of Mr. Trump’s closest campaign advisers, and Cleveland Mayor Frank Jackson, whose city hosted the event.

Mrs. Clinton has addressed the U.S. Conference of Mayors twice in the past two years. Her convention included speeches from nine current and former mayors.

“There’s a general perception that a Clinton administration would be willing to help on urban issues, but on the Trump side we haven’t had much interaction at all—like zero,” Mr. Cornett said in an interview. “We’re scratching our head about why we seem so irrelevant.”

Miami Mayor Tomas Regalado, a Republican, said he isn’t supporting Mr. Trump and probably won’t vote at all in the presidential race. Steve Hogan of Aurora, Colo., and Will Sessoms of Virginia Beach, Va., said they don’t know how they are going to vote. Albuquerque, N.M., Mayor Richard Berry refused to say who he will vote for on November 8.

“I still have to think hard about it,” Mr. Hogan, who has represented the Denver suburb in various political offices in 1974, said in an interview. “It’s not that the Clinton campaign is providing a great reason to go the other way. It’s that the Trump campaign is not giving me any reason to do what I would normally expect to do.”

GOP mayors aren’t backing Mrs. Clinton. Mr. Cornett, of Oklahoma City, said he feared a Clinton administration would slow the economy with burdensome regulations on the banking and energy sectors. He also criticized Mrs. Clinton’s support for easing sanctions on Cuba.

“The things I’ve heard from Trump make me uncomfortable, and the things I know about Clinton make uncomfortable,” Mr. Regalado said. “I haven’t heard anything from these candidates to say to me, well, you know, I’ll go with the lesser of two evils.”

Democratic mayors have largely fallen in behind Mrs. Clinton. She has their support in the biggest cities, and has campaigned in battlegrounds with Mayor Andrew Ginther in Columbus, Ohio, and Denver Mayor Michael Hancock.

Asked for a critique of Mrs. Clinton’s platform as it related to city issues, New Orleans Mayor Mitch Landrieu said he wasn’t sure how she would get her agenda through Congress.

“My concern is whether Congress would adequately fund the ideas she has,” said Mr. Landrieu, who has endorsed Mrs. Clinton, said in an interview. “Spending on infrastructure should be a no-brainer, but the challenge is making sure Congress sees us as an important partner and not another special interest.”

Detroit Mayor Mike Duggan, a Democrat backing Mrs. Clinton, said that while Mr. Trump has identified public safety as an issue confronting major cities, he hasn’t provided enough specifics on how to fix the problem.

“Detroiters aren’t impressed with someone being able to describe the problem, or telling you to be angry about it,” Mr. Duggan said in an interview. “Any middle-schooler can describe the problem. If you want to be president of the United States, you ought to have a solution.”