| | | | |  | | By Alex Daugherty | | | | — U.S. imports are trending down ahead of the holiday shopping season, but many large retailers locked in shipping rates months ago, so goods will remain expensive. — EPA takes a first step toward regulating lead-spewing aircraft engines. — South Korea isn't happy about the new EV tax credits. IT'S TUESDAY: You're reading Morning Transportation, your Washington policy guide to everything that moves. As always, send tips, pitches, feedback and song lyrics to adaugherty@politico.com. You can find all of us on Twitter: @alextdaugherty, @TSnyderDC and @Oriana0214. "I don't want a lot for Christmas/There is just one thing I need/I don't care about the presents underneath the Christmas tree/I just want you for my own."
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| | | DECK THE HALLS: Container prices are way, way down from their late 2021 peaks, with the average price for a spot on a ship from East Asia to the U.S. West Coast at around $2,400, according to Freightos. That's down from about $7,200 in July. But many large retailers, such as Costco , have locked in shipping rates for months to prepare for a potentially volatile holiday season. That leads to prices at the shelf remaining relatively high even as shipping costs tumble. IMPORTS SLIDING : The National Retail Federation projects that imports are heading to their lowest levels since early 2021, a reflection of the falling shipping prices. But while monthly imports this year exceeded 2021 levels from January through June, the trend flipped starting in July. NRF projects that imports through the holiday season will be lower than their 2021 levels because many shippers imported goods months ahead of time. "Many retailers brought in merchandise early this year to beat rising inflation and ongoing supply chain disruption issues," Jonathan Gold, the National Retail Federation's vice president for supply chain and customs policy, said in a statement. "Despite the lower volumes, retailers are still experiencing challenges along the supply chain, including U.S. ports and intermodal rail yards." WATCHING TALKS : Monday's announcement that the Brotherhood of Maintenance of Way Employes Division had rejected a tentative agreement with the freight railroads adds uncertainty to the holiday season, though both sides will need to negotiate again before a possible strike. West Coast ports are in the midst of labor negotiations, too, and the uncertainty about the situation has prompted some companies to ship goods to the East Coast instead. The Port of New York and New Jersey became the busiest container port in the U.S. for the first time starting in August (though the Port of Los Angeles and Port of Long Beach combined are still much bigger). NOT JUST THE U.S.: Ben Hackett, founder of maritime consulting firm Hackett Associates, said in a statement that the import slowdown is also a result of China's ongoing zero Covid approach, with factories across the country closing throughout October due to a combination of holidays and Covid precautions. Hackett said the closures "have impacted production, reducing demand for shipping capacity from that side of the Pacific as well."
| | | DEAL REJECTED: A majority of the nation's third-largest freight rail union on Monday rejected a tentative contract agreement reached last month, saying the proposed changes didn't go far enough to address quality-of-life issues. BMWED membership voted down the agreement with 6,646 ballots against ratifying the tentative pact and 5,100 approving the agreement. "Railroaders are discouraged and upset with working conditions and compensation and hold their employer in low regard," BMWED president Tony Cardwell said in a statement. "Railroaders do not feel valued. They resent the fact that management holds no regard for their quality of life, illustrated by their stubborn reluctance to provide a higher quantity of paid time off, especially for sickness." WHAT IT MEANS : The result means BMWED enters a bargaining period with the four Class I freight railroads until five days after Congress reconvenes. Congress is currently out of session until after the November elections, meaning a strike would be possible beginning Nov.19 if Congress returns on the 14th as currently scheduled. Four other railroad unions approved the tentative agreements with the freight railroads, but every one of the 12 unions representing freight rail employees must ratify their contracts to prevent a strike. Voting for other unions will be completed by mid-November.
| | | BAD FOR YOU: EPA said that lead emissions from certain aircraft engines are a threat to public health and welfare, a first step toward regulating roughly 170,000 small aircraft that still use leaded fuel, Alex Guillén reports. MOSTLY AIRCRAFT : Environmental advocates have long called for EPA to take action on the fuel used by small aircraft, which are the top remaining source of lead emissions in the U.S. In 2017, aircraft emitted 470 tons of lead — 70 percent of all lead emitted in the U.S. that year. Jet fuel used by commercial aircraft is unleaded. "Aircraft that use leaded fuel are the dominant source of lead emissions to air in the country," EPA Administrator Michael Regan said in a statement. "Today's proposal is an important step forward as we work to reduce lead exposure and protect children's health." ALASKA PROBLEM: Lead emissions are especially an issue in Alaska, where transport across the vast state more heavily relies on these types of smaller piston-engine planes. In Alaska, almost half of the Native population lives within 500 meters of a runway despite making up 15 percent of the state's overall population. What's next : EPA released the text of the proposed finding, as well as a technical support document and fact sheet. The proposal, Reg. 2060-AT10, will be open for 90 days of public comment once published in the Federal Register. ASPIRATIONAL GOAL: All 193 members of the International Civil Aviation Organization (ICAO) pledged to support a long-term aviation goal of net-zero carbon emissions by 2050 at the end of their 41st assembly meeting. The move was praised by environmental groups and some industry groups, though many aviation manufacturers in the U.S. have already committed to a similar goal. The Aerospace Industries Association called the goal "a key milestone on our path to a more sustainable future for aviation." "This affirmation of support provides the global aviation industry with a harmonized framework to reduce carbon emissions, advance new technologies, and achieve a brighter, greener future," AIA President and CEO Eric Fanning said in a statement.
| | | HOLD ON A SECOND : South Korea isn't happy about new tax credits for American-made electric vehicles as the Biden administration begins putting them into action, with the issue threatening to disrupt an otherwise stable trade relationship between Washington and Seoul, Steven Overly reports. The friction comes at a time when the Biden administration is ramping up its economic outreach across Asia in an attempt to rival China's geopolitical pull in the region. NO TO THE IRA : Korean officials say U.S. policies that undercut their automakers — Hyundai's electric vehicles became ineligible for the expanded tax credits after the Inflation Reduction Act became law — smack of the protectionism that infuriated trade partners during the Trump administration and have begun to erode their willingness to cooperate on Biden's agenda. "The public anger in Korea is severe," one Korean Embassy official told POLITICO. "The discriminatory subsidy [for electric vehicles] and batteries is no less egregious than Trump's tariffs, as it intends to reduce imports from allies and partners." NEXT STEPS: The embassy official noted that Seoul has not ruled out bringing its complaint to the World Trade Organization, though that option would be time-consuming and stall unless the appellate body were restored. Initiating a bilateral trade dispute also carries political risks, the official added, noting that hasn't been done in the 10 years since the countries entered into a free trade agreement.
| | | Alex Schroeder is now the chief technology officer for the Joint Office of Energy and Transportation and is on assignment from the National Renewable Energy Laboratory. He most recently was interim executive director of that office until Gabe Klein was hired as executive director. (h/t Daniel Lippman)
| | | — "No, you still can't bring marijuana through a TSA checkpoint." The Washington Post. — "The cop car has become the cop SUV." Curbed. — "Siding with Boeing, Southwest pilots ask Congress to grant MAX extension." The Seattle Times. — "'The owner of this iPhone was in a severe car crash' — or just on a roller coaster." The Wall Street Journal. — "As electric vehicles shrink gas tax revenue, more states may tax mileage." Stateline. — "How Finland put traffic crashes on ice." Bloomberg. — "Electric-vehicle makers and suppliers drive into a stormy IPO market." The Wall Street Journal. — "Rivian recalls nearly all of its vehicles due to loose fasteners." The Wall Street Journal . — "As EV sales grow, battle over U.S. road weight limits heats up." Reuters. — "Return to Sanibel Island after Ian: Smashed homes, slick ooze, and wondering how to rebuild." Fort Myers News-Press. — "Russian-speaking hackers knock multiple US airport websites offline. No impact on operations reported." CNN.
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