Massive U.S. transportation bill will revive Ex-Im bank

A U.S. highway bill, which was passed last week by both the House and Senate and signed into law by President Obama, could be a boon for the air cargo industry in terms of ground-based infrastructure and aircraft financing. The “Fixing America’s Surface Transportation Act,” or FAST, will pump US$305 billion into repairing the United States’ crumbling roads and bridges, and also breathe new life into the Export-Import Bank, which benefits companies like Boeing and General Electric. The charter for the Ex-Im bank was renewed until 2019.

This will be the first U.S. highway measure in 10 years that is designed to last longer than two years, according to Reuters. The U.S. Airforwarders Association said it was thrilled that the package establishes a national multimodal freight network, that it contains language to reform the compliance, safety and accountability (CSA) initiative, which aims to improve large truck and bus safety, and that it includes $253 billion to fund badly needed highway and bridge infrastructure maintenance for a period of five years.

Meanwhile the bill will revive the 81-year-old Export-Import bank, which has not been able to conduct new business since June, when Congress allowed its charter to expire. The Ex-Im bank is important to trade because it makes it possible for American companies to sell big-ticket items – such as aircraft – by offering a guaranty for the financing. However, the lending limit will be reduced by $5 billion to $135 billion and will include reforms that would increase transparency.

However, as things now stand, the bank has authority to approve transactions only up to a maximum value of US$10 million, because three of the five places on its Board of Directors are vacant and a quorum is required for approval of larger transactions. President Obama nominated former Ex-Im board member Patricia Loui-Schmicker to a second term on the board in March of this year, but the Senate Banking Committee (chaired by a Senator who opposes re-authorization of the Bank) has refused to hold a hearing on her nomination.

Other funding sources for the package include an increase in customs fees. The package also supports rail transportation and auto industry whistleblowers.