Government Shutdown Effect On The Freight Industry

Canva - Capitol Building.jpg

How is the freight market being affected by the government shutdown?

Well, since the shutdown began on December 22nd it has lasted for a solid 3 weeks. The shutdown, as you may already know, was a direct result of Trump after lawmakers failed to pass a bill granting funding for the development of the wall on the U.S. -- Mexico border.

The Congressional Budget Office (CBO) had this to say about the shutdown’s effects on GDP:

In subsequent quarters, GDP will be temporarily higher than it would have been in the absence of a shutdown. Although most of the real GDP lost during the fourth quarter of 2018 and the first quarter of 2019 will eventually be recovered, CBO estimates that about $3 billion will not be. That amount equals 0.02 percent of projected annual GDP in 2019. In other words, the level of GDP for the full calendar year is expected to be 0.02 percent smaller than it would have been otherwise (1).

Considering the reduction of annual GDP projections, how much would the shutdown then affect the transportation industry?

Fortunately, companies are still shipping because there is plenty of freight up for grabs in the market. Even the Department of Defense has remained funded through this shutdown, however, that has not always been the case in prior, more brief shutdowns (2). Freight will remain steady throughout the course of this shutdown, at least from the Department of Defense.

What about the ports?

Well, freight forwarders seem to have no issues with getting ships docked within the ports, but they are having trouble when it comes to getting those same ships unloaded and placed onto trucks in a timely manner (3). The lack of personnel at the ports has created an inability to check and approve documentation from incoming ships, resulting in some of them having to turn back around. This costing shippers several hours in the logistics process that they cannot afford. Check out the video below to hear more about the details of this story.

Additionally, weight stations, since operated on a state level, will remain unaffected during the shutdown.

What if I need to obtain a carrier or broker authority?

Don’t you worry, the FMCSA will also remain unaffected by the shutdown and so you can still get into the business regardless of the lack of government workers.

Despite all of the craziness going on, it’s safe to say that the transportation industry is fortunate to be affected so little. One important takeaway from all these events would be, if you are a company or you work for a company that has shipping needs, you work with a broker that is reliable and genuinely cares about your best interests.

Finding the right broker

For Eagle Express Service, it is all about our customers. In fact, we have a good blend of customer accounts and have freight from nearly every state for vans, reefers, flatbeds, and power only. We have good paying loads and we make sure to put carriers and drivers as our #1 priority. We work closely with our customers to provide them the best service and the utmost transparency/visibility.

During these tough times with government shutdown, we are working extra hard to streamline transportation. Many shippers and receivers are closed or running on cut down hours and we make sure you verify and relay this information so shipments pick up and deliver on time and drivers are not stranded or waiting at an empty warehouse.