September 29, 2023
What We Know So Far about the Impacts of a Potential U.S. Government Shutdown
Updated on September 29, 2023
With a government shutdown now all but assured, here’s what we know so far about the impacts of a potential U.S. government shutdown on October 1, 2023. The situation is dynamic and we will be closely monitoring the impacts should a shutdown occur. We will continue to update you with the latest insight from the Flexport team.
If a U.S. government shutdown does occur, it is likely to be significant in duration with no clear path for reopening the government. We anticipate it lasting from two to eight weeks.
Likely Impacts on Commerce
While there’s still a lot unknown, based on previous government shutdowns, we anticipate that there will be slowdowns and disruptions in the facilitation of trade. Given the diversity of funding sources and authorities of various government agencies involved in international trade, the business community should anticipate the following impacts during a shutdown –
- The U.S. Department of Transportation (DOT) will continue activities and operations necessary for safe travel and movements for vehicles, including trucks and aircraft. At the moment, we anticipate normal operations for air transportation as the majority of the Federal Aviation Administration (FAA)’s workforce will be deemed essential in case of a shutdown.
- The vast majority of the U.S. Customs and Border Protection (CBP) staffing will be deemed essential due to their status as law enforcement officers. Administrative support staff will likely be furloughed; as such, issues related to refunds and other regulatory items may be delayed.
- It is likely the U.S. Consumer Product and Safety Commission (CPSC) port investigators will be furloughed and CPSC targeting will be suspended.
- The Bureau of Industry and Security (BIS), which is responsible for administering the U.S. export controls applicable to dual- use items, should remain relatively well-staffed. According to the Department of Commerce’s 2018-2019 shutdown guidance, almost 70% of the BIS employees were exempted from the shutdown either because they were considered essential or because funding for their positions came from alternative sources.
- The Environmental Protection Agency (EPA) may decide to screen some shipments during the shutdown. This is because the Inflation Reduction Act and some of the new Climate provisions after 2019, provides funding for the compliance of certain environmental laws outside of normal appropriations.
- It is anticipated 80% of the U.S. Food and Drug Administration (FDA) import enabling employees will be considered essential. However, there may be inconsistency in staffing across ports of entry. Delays cannot be ruled out.
- U.S. Fish and Wildlife Services (FWS) will likely continue normal operation at ports of entry since wildlife inspection is funded by user fees and not appropriated funds. However, Import/Export licenses and Designated Port Exception Permits will likely be delayed.
- It is anticipated that the Treasury Department's Office of Foreign Asset Controls (OFAC) will continue to update its sanction blacklist database. OFAC will also develop and administer sanctions and policies within their national security responsibilities.
- Transportation Security Administration (TSA) Inspectors and Officers are essential employees and will continue their national security work.
- The Federal Maritime Commission (FMC) will likely suspend virtually all activities for the duration of the shutdown.
- 90 % of the U.S. Department of Agriculture (USDA)’s Food Safety and Inspection Service (FSIS) employees will continue to work as essential employees.
If you have any questions and would like to discuss your specific circumstances, please contact your Flexport representatives and we’d be happy to assist further.