Are 3PL’s Immune to Government Shutdowns?

The Government Shutdown has an impact on many industries, no matter how small and the 3PL and transportation industry is no exception to this. Before we examine what exactly the length of the government shutdown can do in the future, we need to remember the past. 2018 was a very good year for the transportation industry, economically speaking. With that in mind, 2019 is looking to be another good year for logistics companies. However, the main issue with the government shutdown is how it affects visibility. Many pieces of information, in various industries, has been delayed due to the shutdown; agriculture and construction industry (for instance) data has been delayed due to the shutdown. This delay means that 3PL, and other transportation businesses, need to think far ahead to plan out their future businesses. The longer data delays occur in other industries, the longer 3PL is going to suffer.

More uncertainty means more misinformation. 3PL businesses, as with any other businesses, do not handle misinformation well. Without specific industries having more visibility in their needs, the 3PL industry will be lacking in what business they can conduct. It’s the time of year where the transportation industry starts to slow down. Now, thanks to the shutdown, this slow time of year becomes even slower. The 3PL industry needs to  In the coming sections of this article, we will be reviewing areas of the transportation industry that are affected by the shutdown. The first area that will be reviewed is customs.

Customs | Border Crossing

When the government is in shutdown mode, security becomes a top priority; this internal structure change causes much slower ground transportation imports and exports. The main concern is how this will affect ancillary agencies. Furthermore, this means agencies that need to sign off on clearances, and their ability to do so becomes questionable at best. Which employees will still go into work? What if they remain closed the entire shutdown? These concerns need to be acknowledged before major transportation action is taken. Transportation companies do not want to have their shipments rejected, or stuck, on the other side of the border.

How does the government shutdown affect ocean and air imports? The trade war with China aside, ocean and air imports will be suffering more during the shutdown’s duration. Well, they are affected in a very similar way to the previously mentioned truckload border crossings. The main difference is the importance of ancillary agencies. They play much more important roles for ocean and air imports. However, because of the importance of these agencies, the delays last longer because their protocols take longer. Again, concerns such as which employees get into work are also important. Ocean and air imports stand to potentially take a bigger hit to “transportation speed” during the shutdown than ground border crossing.

This is a bright spot in the middle of the shutdown. Luckily, unlike the previous two entries, day-to-day operations are not affected. The FMCSA is funded by the Highway Trust Fund as an agency outside of what would not be funded by the shutdown. That means that US domestic trucking can continue as usual. However, when delivering shipments to government businesses some slowdown can be expected. Places such as prisons and military bases can cause slowdowns during the daily transportation schedule because most need appointments for deliveries. Thanks to these reasons, 3PL’s are the least affected members, of the transportation industry, by the government shutdown.

As briefly mentioned in the previous entries, employees are feeling the brunt of the shutdown. The lack of employees in various government-related transportation facilities results in a loss of speed. Many employees are working without pay during the duration of the shutdown. Furthermore, aside from the outside factors, leads to internal issues. Employees can be less motivated to do a good job because of the shutdown. These external factors can cause transportation companies to run into, previously, unforeseen issues. “What if they keep my drivers waiting there just because they can?” There are situations where events like that actively happen outside of the government shutdown. Just imagine how it would become during the government shutdown. Hopefully, situations like that don’t impact the companies that have to ship to and from government facilities.

Of course, companies that have foreseen the government shutdown have done their best to prepare with the best example being the FMCSA. Due to the way they’re funded, operations can run smoothly. Following their example, some companies can follow suit by saving in the preceding weeks- of course isolating the signs and validating the message is vital. However, it’s too late for that now and many were still hopeful it would never reach shutdown status. Also, it’s very difficult for most federally operated buildings to operate the way the FMCSA does. At the end of the day, there’s not much the transportation industry can do except deal with the slowdowns. The industry needs to be, temporarily, ok with potentially backlogged schedules, low-morale government employees, and potential scheduling conflicts. We'll continue to present the latest findings as the government shutdown continues.

For more information, follow us each week for the latest transportation industry news or contact DGD Transport here.