Jan2019

How The Government Shutdown Effects Logistics

The government shutdown is now entering day 34, about a quarter of the government remains unfunded including the Department of Homeland Security. WSJ reported that logistic companies that oversee the flow of goods are starting to cut back services and working hours at some sites, raising concerns that delays can spread. The New York Times says, “While some essential work, such as mail delivery and law enforcement, is still being performed, the shutdown has affected operations at nine departments, including Homeland Security, Justice, State and Treasury, and several agencies, including the Environmental Protection Agency and NASA.”

According to CNN 34 percent of 54,230 TSA workers have called in sick. This created delays in some airports. The increase of call-outs has caused hours-long lines in airports and slower paperwork processing. KTMS reported, “At borders, Border Patrols and Border Protection said the federal employees are beginning to feel the strains of the impasse.” With less personnel reporting to work, delays at truck crossings can occur.

We encourage our carriers to ensure that their cold storage is running in good shape. This will keep products cold during the long wait times. We are urging our shippers with products with expiration dates to try to incorporate delays into overall shipping times. This will help ensure that items are received at acceptance dates.

The US Department of Transportation has not been funded for 2019 because of the shutdown, which may delay rulemaking around new Hours of Service proposals. Most shippers will not see any disruption due to the shutdown except for border delays.

Highway and bridge projects already underway are not affected by the federal shutdown. The disruption in federal funding flowing to the states instead affects future projects for which departments were going to award bids in the coming weeks. That will put the bidding process on hold, especially in states that receive a large share of their highway dollars from the federal government.

The shutdown increases the chance for a disruption which could translate into thousands of dollars in demurrage and detention penalties. Each day there is a greater likelihood that the supply chain will be disrupted. Other potential issues include low inventory levels due to delays in customs – leading to a sudden rise in prices that can hurt the bottom line.

Here at some other notable challenges from the government shutdown:

  • Although a government shutdown usually disables the IRS from a number of services, including issuing tax refunds, a White House official confirmed Monday that taxpayers who are owed refunds will be paid on time
  • Post offices will remain operational and mail delivery will continue
  • The Department of Agriculture delays the release of several major domestic and world crop reports until after the shutdown ends. 
  • Amtrak is expected to continue to operate during the shutdown
  • Air traffic controllers, who fall under the jurisdiction of the Federal Aviation Administration (which is under the Transportation Department umbrella) are deemed “essential,” and will keep working during a partial shutdown
  • FDA stopped its routine inspections of seafood, fruits, vegetables and other foods at high risk of contamination, but is still inspecting meats, eggs, grain, poultry, etc.
  • Social security checks will still come, and the US Postal Service will still deliver them
  • Law enforcement personnel are working without pay and delays in Federal court proceedings have slowed, adding to the already large backlog of cases
  • National parks and museums, even the National Zoo, have been closed during the shutdown. A number of national parks are still accessible to visitors, but they will have limited staffing and closed access to various park facilities

Companies can create strategic supply chain plans to help overcome any disruptions caused by the shutdown. CargoBarn uses technology, planning ahead, and extra due diligence to help companies meet customer demands and keep operations moving forward.