Canadian Shipper


U.S. Transportation infrastructure to adapt to numerous changes in 2016: Fitch

NEW YORK, N.Y.–The broader economic climate is set for some rather significant changes next year that the U.S. transportation infrastructure segments are by and large prepared to weather, according to Fitch Ratings in its 2016 outlook report.

Fitch carries a stable outlook for the sector overall next year. However, the long talked about interest rate increase could become a reality before 2015 comes to a close, which would lead to higher borrowing costs as transportation issuers green-light new projects. Nonetheless, ‘The high ratings and large amount of fixed rate debt would render any ripple effect of higher interest rates modest at worst for transportation infrastructure,’ said Director Emma Griffith. ‘Heightened geopolitical challenges in China and elsewhere could also dampen growth prospects for the sector.’

U.S. airports will hold stable in 2016. Low fuel prices will also continue to be an ancillary benefit for airports. The same stable outlook is in place for U.S. ports even as shippers and ports pursue increasing consolidation. Managing congestion and increasing freight volumes remains a focus as vessel size and cargo loads continue to grow, the report said.

The five-year funding bill recently passed by Congress provides longer-term planning certainty for state governments, though a self-sustaining funding source for the Highway Trust Fund remains elusive, the report added.