Archive for June, 2013

June 20, 2013

Yesterday, the House Appropriations Subcommittee on Transportation, Housing and Urban Development (THUD) approved a $44.1 billion appropriations bill, which contains spending levels that are $7 billion less than last year and would cut more than $4 billion from the current spending level under sequestration.

The bill would prohibit the use of any appropriated funds for the California high-speed rail program, and would “significantly reduce” operations and capital/debt service funding for Amtrak, according to an American Public Transportation Association (APTA) legislative alert issued yesterday.

Although the bill would fully fund transit and highway programs under the Highway Trust Fund at MAP-21 authorized levels, it would set transit programs funded out of the general fund at levels below authorized amounts, the alert states. Capital investment grants would be funded at $1.816 billion, or $91 million less than the authorized level of $1.9 billion. The bill also would cut the Federal Transit Administration’s administrative budget to $102.7 million from the authorized level of $104 million, APTA officials said.

In addition, the measure would rescind funds appropriated to carry out New Starts in 2006 and prior years, and would prohibit the use of funds to enter into new full funding grant agreements for New Starts projects with a federal share of more than 50 percent.

The U.S. Department of Transportation’s Transportation Investment Generating Economic Recovery (TIGER) grant program would receive no FY2014 funding, and the program’s prior year unobligated balance of $237 million would be rescinded.

As it has done for the past several years, the Senate is expected to include “substantial” TIGER grant funding in its own THUD appropriations bill, APTA officials said.

via Rail News – House appropriations subcommittee approves bill that would cut funding for transit, Amtrak and high-speed rail. For Railroad Career Professionals.

June 20, 2013

Crude for July delivery CLN3 -3.07% lost $2.84, or 2.9%, to settle at $95.40 a barrel on the New York Mercantile Exchange.

Thursday’s decline was the largest since Nov. 7, 2012. The July contract will expire at the end of Thursday.

Further risk aversion on Thursday and a surge in the U.S. dollar have created “a perfect storm of bearishness” for crude-oil futures, said Matt Smith, a commodity analyst at Schneider Electric.

U.S. jobless claims for the week ended June 15 rose by 18,000 to a seasonally adjusted 354,000, more than expectations of a rise to 340,000. The weaker-than-expected claims data gave more credence for the oil selloff, said Smith. “I think the jobless claims were really the cherry on top of things,” he said.

Data out earlier Thursday — which spurred oil’s losses — showed a further slowing in China’s manufacturing sector in June. The “flash” version of the HSBC manufacturing purchasing managers’ index fell to a nine-month low of 48.3, down from May’s final reading of 49.2. A reading below 50 indicates contraction.

The “disappointing flash reading” for June and the Chinese government’s “priority attention on structural reform rather than near-term weakness, suggest that the economic activity may continue on the weak side in the near term,” said emerging-markets analysts at J.P. Morgan to clients on Thursday.

They also said those factors pose some downside risk to their forecast of a modest recovery in the second quarter.

Softness in Chinese manufacturing activity dents the prospects for energy demand, as do data showing that U.S. oil stockpiles continue to grow. On Wednesday, the U.S. Energy Information Administration said crude-oil supplies rose by 300,000 barrels to 394.1 million barrels in the week ended June 14. A Platts survey of analysts forecast a decline of 1 million barrels.

The combination of events “caused crude oil to throw in the towel,” said Schneider Electric’s Smith.

Crude prices on Wednesday finished floor trading on the New York Mercantile Exchange down 20 cents at $98.24 a barrel, after the EIA data and after the Federal Reserve issued a more upbeat forecast for the U.S. economy.

Stronger economic growth is positive for energy demand, but energy investors have also been concerned that the Fed will soon slow the pace of bond purchases that are aimed at bolstering economic activity.

The Fed on Wednesday said if the economy improves in line with its forecasts, then it foresees reducing the pace of bond buying — currently set at $85 billion a month — by the end of the year.

The dollar climbed after the meeting, further adding pressure on energy prices. Dollar-denominated commodities tend to fall on a rising greenback as they become more expensive for other currency holders.

The ICE dollar index DXY +0.91%  traded at 81.909, up from 81.301 in late trade on Wednesday.

Crude for August delivery CLQ3 -1.98% CLQ3 -1.98% , the most active contract, shed $3.34, or 3.4%, to end at $95.14 a barrel.

Brent crude for August delivery UK:LCOQ3 -1.82%  dropped $3.97, or 3.7%, to end at $102.15 a barrel.

The Energy Information Administration reported an increase of 91 billion cubic feet in U.S. stocks for the week ended June 14, bringing total inventories to 2.438 trillion cubic feet. Analysts polled by Platts had forecast a rise in stocks of between 88 billion cubic feet and 92 billion cubic feet. Natural gas for July delivery NGN13 -1.37%  fell 8 cents, or 2%, to settle at $3.88 per million British thermal units.

July gasoline RBN3 +0.05%  lost 10 cents, or 3.5%, to end at $2.79. July heating oil  fell 10 cents, or 3.4%, to settle at $2.87 a gallon.

via Oil posts biggest one-day drop in 7 months – Futures Movers – MarketWatch.

June 21, 2013

The week that ended June 15 was a good one for U.S. railroads. They originated 288,879 carloads, up 0.5 percent, and 254,266 intermodal loads, up 1.7 percent compared with volumes from the same week last year, according to the Association of American Railroads.

Total U.S. traffic for the week climbed 1.1 percent to 543,145 carloads as four of 10 carload commodity groups posted gains. Among the gainers: petroleum and petroleum products, up 35.6 percent, and chemicals, up 7 percent.

Although the majority of crude oil shipments originate in the western U.S., petroleum product volumes have benefited both western and eastern railroads, said Robert W. Baird & Co. Inc. analysts in their latest “Rail Flash” report. Among the four largest Class Is through 2013’s first 24 weeks, BNSF Railway Co.’s petroleum product carloads skyrocketed 72 percent, Norfolk Southern Railway’s soared 63 percent, CSX Corp.’s jumped 52 percent and Union Pacific Railroad’s climbed 38 percent, they said.

Meanwhile, Canadian railroads reported weekly carloads totaling 78,724, up 2.3 percent, and intermodal volume totaling 54,738 units, up 0.8 percent year over year. For the week ending June 15, Mexican railroads’ carloads rose 8.9 percent to 16,429 but their intermodal volume declined 1.8 percent to 9,793 units.

Through 24 weeks, 13 reporting U.S., Canadian and Mexican railroads totaled 8,896,141 carloads, down 0.4 percent, and 7,246,275 containers and trailers, up 3.9 percent compared with the same 2012 period.

via Rail News – AAR week 24 traffic data: U.S. roads registered gains. For Railroad Career Professionals.

June 19, 2013

The proposed tie-up, the fourth in the U.S. airline industry since 2008, could strengthen recovery in the sector and give carriers more power to raise prices.

The European Commission, which assesses such deals in the 27-country European Union for their competition impact on consumers and rivals, said on its website on Wednesday that it would decide on the issue by July 23.

The EU competition authority could either clear the merger without requiring concessions or extend its scrutiny by 10 working days if the airlines were to offer remedies. It could also open a detailed investigation that could take about three months if it has concerns.

Two U.S. lawmakers on Tuesday called for a careful review of the merger by U.S. authorities to protect travellers from higher prices.

via American Airlines, US Airways seek EU approval for merger | Reuters.

June 20, 2013

A government review finds that the merger of American Airlines and US Airways would reduce competition on more than 1,600 routes traveled by more than 53 million passengers.

That’s a greater loss of competition than occurred with the 2010 merger of United Airlines and Continental Airlines, an analyst for the Government Accountability Office told a U.S. Senate panel on Wednesday.

Antitrust regulators at the Justice Department are reviewing the proposed American-US Airways deal, which also faces a vote by US Airways shareholders and would need approval by the federal judge overseeing American’s bankruptcy case.

American and US Airways executives have defended their merger by noting that they overlap on only 12 nonstop routes.

But the GAO also considered connecting routes — those with at least one stop. GAO analyst Gerald Dillingham told a Senate aviation subcommittee that if the merger is approved, competition would decline because there would be one less airline flying those connecting routes.

There is at least one other airline on most of those 1,665 routes, Dillingham said, including low-cost airlines on 473 of them. The GAO analyst said in his report that the merger also would create a new competitor with at least 5 percent market share on 210 routes affecting 17.5 million passengers, but he added that “the great majority” of those routes already have “effective” competitors.

US Airways Group Inc. CEO Doug Parker, who will lead the combined company if the merger is approved, told the Senate panel that the deal would be good for consumers by creating a bigger airline with service to more locations than either American or US Airways can offer on their own. It would be the world’s biggest airline.

“A broader airline network is better for passengers because it gives them more choices, a wider variety of services, and more competition on more routes,” Parker said. He added that it would create a more powerful competitor for United and Delta, which are much bigger than No. 3 American or No. 5 US Airways.

US Airways and American Airlines parent AMR Corp. announced the proposed merger in February and hope to complete it in August or September.

Sen. Jay Rockefeller, D-W.Va., chairman of the Senate transportation committee, said in a statement that Congress “must make sure that the advantages of a strong aviation sector benefit more than just shareholders.”

Congress has no role in approving or rejecting the merger, although lawmakers can try to influence the Justice Department’s decision. At Wednesday’s hearing, much of the discussion revolved around the fate of Reagan National Airport near Washington, where the combined American and US Airways would operate about two-thirds of the flights although carrying only half the passengers.

The Justice Department could require the merged company to give up some takeoff and landing slots at National, but Parker warned that could prompt the new American to reduce flights between Washington and smaller cities. JetBlue Airways, Southwest Airlines and others could be interested in gaining slots at the airport.

via GAO Says American Airlines, US Airways Merger Would Reduce Competition | NBC 5 Dallas-Fort Worth.

June 21, 2013

PHOENIX – Those who use public transportation in Tempe and Mesa to get to work, run errands or to return home could potentially see a service disruption next month if an agreement is not met between operators and their employer.

Members of the Amalgamated Transit Unit, or ATU, have threatened to go on strike against their employer, First Transit, early next month if contract negotiations don’t smooth themselves out, said ATU in a press release.

The ATU Local 1433, which represents bus and light rail operations in Phoenix, Tempe, Mesa and Yuma, filed charges with the National Labor Relations Board citing bad faith bargaining, regressive bargaining, failure to provide information and threats to partially impose its proposals against First Transit.

“We do not believe that First Transit is keeping the promises that they made to the Regional Public Transit Authority when they were awarded the contract,” said Bob Bean, President of the Union.

First Transit said in an emailed statement, “We have negotiated in good faith for several weeks and have reached agreements with the ATU on most issues. We will continue to bargain in good faith and hope to reach an agreement on the remaining open issues during next week’s bargaining sessions.”

Formal mediation has been requested and will take place on June 25 and June 28.

via Bus strike: Amalgamated Transit Union members threaten to strike against First Transit.

June 20, 2013

OAKLAND — Two state mediators have joined BART’s slow-moving labor contract talks this week with employee agreements due to expire June 30, the transit district reported Wednesday.

The Bay Area Rapid Transit District has asked workers to start making payments toward their pensions, instead of having BART pick up the full tab.

BART also wants workers to pay more than $92 a month toward their medical insurance premiums — the transit district pays between $700 and $1,900 per month per employee.

BART union leaders said they want pay increases, and measures to protect station agents against assaults. The union for station agents has proposed that agents shouldn’t have to work alone before 6 a.m. or after 10 p.m.

BART has five labor unions with related but separate labor contracts.

via BART contract talks joined by state mediators – San Jose Mercury News.