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How Will The Government Shutdown Affect Logistics & Transportation?

government shutdown transportation

Whether you agree with it or not,  a government shutdown has become reality as of midnight EST last night. Since the government has now shutdown there are far-reaching effects, including thousands of government workers furloughed- many of whom who support the transportation industry in one way or another. That’s because the government is involved in everything from security and air traffic control to access to national parks and more.

Since the 1970′s, the government has shutdown a total of 17 times. The last time the government shut down, in 1995, it lasted three weeks – the longest on record. Nearly 300,000 government employees were furloughed and almost half a million went without a paycheck until being reimbursed later after the resolution.

Will the Government Shutdown Affect Logistics and Transportation Processes and People?

What does this mean for logistics and transportation professionals who must deal with and comply with Department of Transportation regulations as well as the Federal Motor Carrier Safety Administration if Congress can’t come to an agreement?  There are many last minute and hurried plans being laid out from the many agencies that regulate freight movements as most expected a shutdown to be averted.

For example, The Department of Transportation informed employees last Thursday, September 27, about plans for this week.

Department of Transportation Still Operating with Funds From the Highway Trust Fund

government shutdown logisticsDOT told all 1,102 employees of the FMCSA and 2,914 employees of the Federal Highway Administration before the shutdown that they would have to come to work. Funding for those agencies comes from the Highway Trust Fund, which means they don’t depend on the appropriation process in Congress for their funding.

Transportation Secretary Anthony Foxx issued a memo to DOT employees to outline the situation.

“Some employees will be excepted (from the shutdown) because their work directly addresses emergency circumstances, while others will not be subject to furlough because their positions are not supported by annual appropriations, and even these categories may change based on the length of the potential shutdown,” Foxx wrote Wednesday, Sept. 25.

“I know that this uncertainty has put everyone in a difficult situation, and should a lapse occur, that it could impose hardships on many employees as well as the people that we serve every day,” Foxx wrote. “We will work closely with all staff to do our best to support you throughout this period.”

Expected Transportation and Logistics Operations Mostly In Effect

  • Roadside truck inspections, for example, will continue because FMCSA money supports the state law enforcement agencies doing the inspections.
  • FMCSA Administrator Anne Ferro said in a memo to employees before the shutdown that she did not expect anyone in the agency to be furloughed.
  • Most highway projects involving federal money will also be spared because funding is from the trust fund. The exception is for projects such as the Transportation Investment Generating Economic Recovery grants funded by Congress.
  • Transportation Secretary Anthony Foxx said in a Sept. 25 memo to employees that DOT had “determined which employees would continue to report to work in the event of a lapse in funding and which employees would be placed on furlough,” Foxx said.
  • Airport operations around the country will continue as usual because, like highways, airports are supported with trust fund money.
  • Rail will however be affected However, the Federal Railroad Administration has no trust fund, so, that agency will furlough employees.
  • Truckload border crossings could see delays as the Customs and Border Patrol will prioritize security of all kinds over speedy freight flows, and will depend on several other agencies' cooperation to avoid any longer delays, so be prepared.
  • The same can be said about air and ocean imports in the way of delays, since there are many government agencies involved in this process, but additional sequestration kicks up in October, regardless of a shutdown, so this could add to further delays.

In addition, a federal shutdown would not directly affect roadside trucking enforcement, scale houses or inspections. Those are handled by state agencies. Most of those programs are funded through Highway Trust Fund grants that are paid out annually.

What do you think about the government shut down? A needed stand off or could it have been avoided?

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Adam Robinson
Adam Robinson oversees the overall marketing strategy for Cerasis including website development, social media and content marketing, trade show marketing, email campaigns, and webinar marketing. Mr. Robinson works with the business development department to create messaging that attracts the right decision makers, gaining inbound leads and increasing brand awareness all while shortening sales cycles, the time it takes to gain sales appointments and set proper sales and execution expectations.
Adam Robinson
Adam Robinson
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