How the Government Shutdown Affects Imports and Exports

 In customs clearance, government shutdown, International Shipping

Government shutdown. It’s happening. It has many effects. If you’re an international shipper, you know government paws have to touch all imports and exports. You know, that little thing called customs? So how does the government shutdown affect international shipping?

First, a very brief overview of why we’re seeing a government shutdown:

It’s Congress’ job to pass a spending bill to fund the government. Congress can’t seem to do its job because Republicans and Democrats are fighting over The Patient Protection and Affordable Care Act a.k.a. Obamacare. So we get a government shutdown.

Don’t worry, despite not being able to manage this whole doing their job thing, the men and women who represent us in the House and Senate will still get paid their six figure salaries.

Yes, I am being a bit harsh.

Still, if I ever run for president, my campaign will include paying my position, and probably Congressional positions too, what the average American worker makes (technically, I couldn’t legally change the pay of the president until the next one took over, but refunding most of my wages shouldn’t be a problem since being a multi-millionaire is basically a prerequisite for being President of the United States). Perhaps paying multi-millionaires $400,000 a year while letting them live rent free in a mansion and giving them expense accounts on top is a microcosm of how our government finds itself spending close to $2 billion more a day than it makes.

Sorry. I digress.

Want a larger overview of the government shutdown? You can go to CNN. Or Google it. Just don’t ask random people on the street since, as this Jimmy Kimmel clip shows, they probably don’t know the difference between The Affordable Care Act and Obamacare… Oh, wait. Still, I’ll bet they’d tell you whether the shutdown is the fault of the Republicans, the Democrats, or Obama.

Now, to the effects the Government Shutdown is having when it comes to importing and exporting goods…

The Government Shutdown has importers and exporters scared.

The mood and outlook of shippers can have a serious impact on the number and size of cargo shipments in the international shipping industry.

A Market Watch blog highlights the worries many retailers are having with the government shutdown that caused 6,000 U.S. Customs and Border Protection (CBP) employees to get furloughed at a time when shipments for the holiday season are coming in.

Government Shutdown Affects Customs 6,000 is a big number, but looks a little smaller when compared to the 58,000 CBP workers you start out with. CBP inspectors are considered “essential staff” so cargo is being processed without major delays from the CBP so far.

If only that were the whole story.

There is plenty of growing potential for delays from the CBP as the shutdown goes on. The longer the shutdown lasts, the more severe the danger of delays grows. But where the real nervousness for shippers comes in is from other government agencies which have a part in clearing cargo.

The Market Watch blog highlights it like this: “…once containers clear the ports, the U.S. Consumer Product and Safety Commission, Food and Drug AdministrationEnvironmental Protection Agency, and United States Department of Agriculture are also required to put their stamp of approval on imported products.”

Chances are good that if your imports or exports have to deal with these agencies or ones like them, you’re feeling the heat of the government shutdown already.

“The U.S. government’s partial shutdown is beginning to gum up trade,” according to The Wall Street Journal.

In an article from The Wall Street Journal it’s reported, “More than 40 government agencies, including the EPA, the Department of Agriculture and the Department of Commerce, are involved in trade shipments, said Ms. [Marianne] Rowden [president of the American Association of Exporters and Importers]. Fourteen agencies have ‘release and hold’ authority that trumps clearance from U.S. Customs and Border Patrol, she said.”

The article goes on to report that many of these government agencies “have pared staffs and closed websites”.

The article features a number of places where the government shutdown has caused problems for U.S. imports and exports including The Bureau of Industry and Security not giving necessary export authorizations, the EPA not clearing pesticides for importation, and USDA’s Animal and Plant Health Inspection Service not having inspectors available to clear things like wood for exportation.

Delays in being able to import or export products like the ones above and more are major hits, not just to particular businesses, but to the U.S. economy as a whole.

If your international shipping involves things like metals, wood, drugs, certain electronics, and the many more goods that require special authorization from government agencies other than the CBP, you could be in for serious delays. Those delays will only get worse the longer the government shutdown goes on.

I liked the close of the Wall Street Journal’s article:

[Not being able to move a load of lumber because the shutdown has no one available to inspect the wood] has caused Mr. Hodges, chairman of Titan Transfer Inc., to conclude that his wood inspection is “nonessential.” But multiply his load by many others and “it’s probably deemed more essential than a lot of people think,” he said. “None of ’em in Washington have much of a clue about what happens in the Main Streets across the U.S. They live in La-La Land.”

Here in the real world, businesses and people’s jobs depend on international shipping. It is essential to the U.S. economy. During the government shutdown, Universal Cargo Management will do everything possible to make sure your imports and exports still go as smoothly as possible. That’s our job. And I dare say we get it done a whole heck of a lot better than Congress gets national budgets done.

Click Here for Free Freight Rate Pricing

Sources:

http://blogs.marketwatch.com/behindthestorefront/2013/10/07/government-shutdown-worries-merchants-counting-on-imports-clearing-customs/

http://online.wsj.com/news/articles/SB10001424052702304441404579121654233728452

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