Summary
The transportation sector is undergoing rapid change driven by infrastructure funding priorities, environmental policy battles, and evolving domestic manufacturing mandates. Whether operating a global shipping fleet, managing a regional rail network, advancing autonomous vehicles, or developing and financing airport expansions, understanding these cross-cutting trends is critical for strategic planning and risk management.
This advisory examines the following topics affecting the transportation industry:
- Resurgence of Tolling and User-Fee Models
- Stricter “Buy America” Requirements Raising Costs
- Shifting Ground on Emissions Standards and EV Viability
- Economic Pressures Reshaping the Freight Sector
- Federal Autonomous Vehicle Legislation Stalls; Administrative Action Fills the Gap
- Preemption AV Bills Face an Uphill Battle in Congress
- Administrative Action Provides Limited Relief for Industry
- Rail Consolidation and Private Investment on the Rise
- Changing Tariff Landscape for Aviation Industry
The Bottom Line
These shifts highlight the importance of proactive monitoring, adaptable contracts, and strategic scenario planning. In a landscape where regulations can change and vary significantly by jurisdiction, having experienced counsel is critical to interpreting new requirements, mitigating risks, and identifying opportunities early.
The transportation sector is undergoing rapid change driven by infrastructure funding priorities, environmental policy battles, and evolving domestic manufacturing mandates. Whether you operate a global shipping fleet, manage a regional rail network, advance autonomous vehicles, or develop and finance airport expansions, understanding these cross-cutting trends is critical for strategic planning and risk management.
Resurgence of Tolling and User-Fee Models
Tolling and toll concession programs are making a strong comeback as states seek sustainable ways to fund transportation infrastructure. Georgia, Tennessee, Washington, and Oregon are now exploring or expanding toll projects, following the lead of Virginia, Indiana, and Illinois. Expect broader application of “user pays” principles, potentially impacting freight corridors, interstate bridges, and even urban arterials, requiring operators to reassess routing strategies, pricing, and long-term concession agreements.
Stricter “Buy America” Requirements Raising Costs
A longstanding manufactured products exemption under federal Buy America rules has been eliminated, extending domestic content requirements to a wider array of transportation projects. In an inflationary environment, this shift can significantly increase project costs, alter procurement timelines, and affect vendor eligibility. Stakeholders should evaluate supply chain readiness, explore compliance certifications early, and consider alternative contracting structures to mitigate cost escalation.
Shifting Ground on Emissions Standards and EV Viability
Legal and regulatory challenges to greenhouse gas restrictions and California’s vehicle emissions standards are reshaping the automotive and transit manufacturing landscape. While recent actions may temporarily ease domestic production of traditional vehicles, they also inject uncertainty into the business case for electric and connected/autonomous vehicles (EVs/CAVs). This uncertainty extends to supporting infrastructure such as charging and grid integration, potentially slowing investment and deployment schedules across the sector.
Economic Pressures Reshaping the Freight Sector
The volatile economics of the U.S. trucking industry, caused by the pandemic, recent U.S. trade policies, and fluctuating demand, have caused a downturn this year that has produced increased commercial legal disputes. Chief among these are claims for detention demurrage brought by ocean carriers and NVOCCs against a wide variety of consumers and connecting transportation and logistics service providers, including drayage operators and other motor carriers. While OSRA 2022 curbed much improper claim activity in this arena, many ancillary charge disputes predate that legislation. Equipment shortages and port congestion contribute to the environment. With 2025’s slump in industry economics, insolvencies and bankruptcies are on the rise, with service providers seeking to collect freight and other charges through litigation, often on dubious bases. This environment has also prompted industry players to explore restructuring as a strategy.
Federal Autonomous Vehicle Legislation Stalls; Administrative Action Fills the Gap
The federal push to create a unified national framework for autonomous vehicles (AVs) has reached a legislative stalemate. Despite strong backing from the Administration and industry, proposed legislation to preempt the complex patchwork of state laws is unlikely to pass in the current Congress. Thus, the AV industry will continue to face regulatory uncertainty, requiring manufacturers, technology developers, and fleet operators to maintain a sharp focus on navigating varied and evolving state-level requirements.
Preemption AV Bills Face an Uphill Battle in Congress
Two significant bills were introduced this summer, but both efforts face significant opposition.
For commercial vehicles, the AMERICA DRIVES Act would prohibit states from requiring a human driver in a commercial AV. For passenger vehicles, the Autonomous Vehicle Acceleration Act of 2025 would update Federal Motor Vehicle Safety Standards (FMVSS) to permit the sale of vehicles designed without traditional human controls.
Proponents of these bills note that they are vital for U.S. economic competitiveness and supply chain modernization. However, a coalition of safety advocates, labor unions, and consumer groups has developed to oppose these bills. That opposition, combined with the history of failed AV legislation in prior sessions, makes it highly improbable that either bill will secure the votes needed.
Administrative Action Provides Limited Relief for Industry
Given the legislative gridlock, near-term federal support for AVs will continue to come from administrative actions rather than new legislation. The DOT and NHTSA are using their existing authority to support the industry, primarily by streamlining the Part 555 exemption process that allows for the deployment of a limited number of vehicles with novel designs that do not meet current FMVSS. On September 4, 2025, NHTSA also reiterated its intention to engage in rulemaking to amend several FMVSS as applied to automated vehicles with no manual controls.
Additionally, NHTSA’s Third Amended SGO on Crash Reporting became effective in June and reduced the immediate compliance burden on manufacturers by extending the timeline for initial serious incident reports (from one day to five) and eliminating mandatory monthly reporting when no incidents occur.
Given the continued legislative stalemate, the industry must continue to navigate various state laws while capitalizing on limited administrative actions to maintain momentum.
Rail Consolidation and Private Investment on the Rise
Private infrastructure funds are increasingly active in acquiring regional railroads, underscoring continued consolidation in the freight sector. FTAI Infrastructure recently announced a $1.05 billion agreement to acquire Wheeling & Lake Erie Railway, commonly cited as the largest independent regional railroad in the United States with approximately 840 miles of track. The transaction, expected to close subject to Surface Transportation Board approval, reflects the importance of scale, diversification, and network synergies in freight rail M&A. Similar transactions in 2025, including acquisitions of Minnesota Commercial Railway and Sabine River & Northern, signal sustained investor appetite for long-term transportation infrastructure assets with strong ties to energy, steel, and manufacturing supply chains.
Changing Tariff Landscape for Aviation Industry
Commercial aircraft and aircraft parts and engines imported into and exported from the U.S. had generally enjoyed zero tariff treatment under the 1980 WTO Agreement on Trade in Civil Aviation. That all changed on April 2, 2025, when President Trump announced new tariffs on a wide range of goods, including a 15% tariff on commercial aircraft and aircraft parts and engines imported from the EU. These tariffs not only impacted the purchase and sale of new aircraft equipment, but also in some cases included tariffs on the cost of aircraft engines and components being overhauled in foreign shops. On July 27, 2025, the U.S. and the EU announced they reached a framework agreement that would, among other things, exempt all commercial aircraft and aircraft parts and engines from tariffs. It is expected that the new U.S. / EU trade deal will be finalized and implemented soon.
These shifts highlight the importance of proactive monitoring, adaptable contracts, and strategic scenario planning. In a landscape where regulations can change and vary significantly by jurisdiction, having experienced counsel is critical to interpreting new requirements, mitigating risks, and identifying opportunities early.
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