Shippers that bring goods into and out of the US could soon feel the effect as the government shutdown begins. On October 1, Congress disagreed on an operations funding bill, leading to the US government shutting down. When this happens, it can cause widespread disruptions for Americans and the economy in numerous ways. Along with impacting different sectors, a shutdown would directly impact international and domestic shipping. For example, it will affect the CBP (Customs and Border Protection), part of the Department of Homeland Security. This article will explain the impact of a government shutdown on cargo movement and how to protect your shipment.
What Can International Shipping Expect as the Government Shutdown Begins?
One of the most significant effects of a government shutdown on international shipping is increased delays. When this happens, the government will furlough or send home up to 750,000 federal workers without pay. While CBP officials are “essential,” ports will remain open; however the shutdown could furlough other workers, resulting in delays. An example is the FDA (Food and Drug Administration) workers, who may have to inspect certain imports before customs release. Many FDA workers are not essential, meaning the government could temporary discharge them, and fewer staff may lengthen customs clearance. During the last government shutdown in December 2018, delays rose by nearly 20% in the port of Los Angeles.
Delays can have further implications for supply chains, particularly for importers of perishables and pharmaceutical products with limited life spans. In addition to damaged goods, delays could cause higher costs in other parts of the supply chain. An example is drayage, the movement of goods over short distances, like from a seaport to another location. Nonessential functions may also pause for agencies like the Department of Commerce and the US International Trade Administration. This could further interrupt the shipping process by pausing permits and export licenses for shippers. A prolonged shutdown could further hurt trade and push foreign partners to look for countries other than the US to import from.
How Can Shippers Prepare?
Despite the government shutdown already starting, shippers can still protect their shipments during this time. The shipper must be current with any regulations that can impact cargo movement. Reading news articles or speaking to experts on importing and exporting are ideal ways to do this. Although ports run during this time, importers should prepare for longer transit times than usual. Importing through seaports with less traffic or using alternative methods of conveyance, like air or land, can quicken the process. shippers must file paperwork correctly since mistakes can lead to holdups in customs. If customs clearance is delayed, storing the goods in a bonded warehouse can prevent immediate duties.
When shipping cargo internationally, various situations, such as a government shutdown, can impact the process. While alarming, it should not stop the importation of cargo into the US. However, the shipper must take the proper steps to avoid disruption. Along with being informed and planning, an importer can prepare by contacting a customs broker. Brokers are licensed individuals or corporations who arrange the customs clearance process on behalf of the importer. They do this by providing various solutions like ensuring regulatory compliance, providing paperwork, calculating duties, and more. Contact A1 Worldwide Logistics at info@a1wwl.com or 305-425-9456 to speak to our brokers regarding transporting your cargo.