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2019-01-15 Röhlig USA U.S. Government Shutdown Update

From Röhlig USA:

As of midnight, December 21, 2018, the United States government was partially shut down due to an ongoing political crisis. This partial shutdown of government, as of January 12, 2019, reached the longest mandated shutdown in U.S. history. The shutdown continues to affect more than 800,000 federal workers in nine different departments, as well as several federal agencies. These departments include, and are not limited to, Homeland Security, Justice, Agriculture, Treasury, Interior, Transportation, Commerce, Environmental Protection Agency, and Housing and Urban Development. Information that we currently have on hand, in terms of the international exports/imports and customs, are as follows:

Airfreight Export and Import

Currently, there are no significant delays related to air operations. The Transportation Security Administration (TSA) has advised that the effects are minimal and are requesting that TSA officers report to work as they are deemed essential in their daily work functions.

The effects are primarily affecting travelers who are anticipated to face longer inspection wait lines to pass customs checkpoints. As of January 15, 2019, TSA has canceled training for hundreds of workers as the shutdown continues to be debated. 

Seafreight Export and Import

The Federal Maritime Commission (FMC) continues to operate without issue. Rate filings can be done electronically and currently there are no delays being experienced as a result of the shutdown. 

Based on feedback from shipping lines, there are currently no issues on the waterways or terminals, with the exception of APM Terminals on the U.S. East Coast. APM Terminals has been experiencing significant delays due to the backlog resulting from labor shortages leading up to the holidays, the holiday closures, as well as the government shutdown.

As of Jan. 14, 2019, CNBC ran a newscast claiming that there are about 300 ships that are not allowed into piers because of expired COFRs (Certificates of Financial Responsibility). Such ships are unable to renew due to the government shutdown. We are unable to corroborate this information through any other media sources. Terminals, in an effort to confirm this information, were contacted, but calls were not being addressed.

Customs and Border Protection (CBP)

For reference, please see below the following statement issued by Customs and Border Protection (CBP) to the National Customs Brokers & Forwarder Associations of America (NCBFAA):

"U.S. Customs and Border Protection (CBP) Officers remain steadfastly on duty to safeguard commerce despite the lapse in appropriations. Our vital frontline activities continue without a reduction in the service that is provided to our stakeholders. CBP has equitably accommodated all additional requests by marine terminals to ensure the economic security of the United States by facilitating legitimate trade. The men and women of CBP have been and will remain dedicated to our mission of securing the Homeland."

2019-01-14 Potential U.S./Mexico Border Shutdown Update

1. What are potential problems that could occur in the unlikely event of a U.S./Mexico border closure?

  • Currently, closure of the U.S./Mexico border is purely speculation and unlikely to withstand legal scrutiny if implemented.
  • Any border closure would primarily affect trucking and rail transport between the two nations, as well as potentially increasing costs for holding material at consolidation points along the U.S./Mexico border (i.e., Laredo, El Paso, etc.). 
  • Upon re-opening the border, trucking and rail would likely reach capacity and incur a premium to clear up the backlog of goods. 
  • In the unlikely event of a border shutdown, transportation alternatives include: sea freight, which is the least expensive option, but takes longer than truck; and air freight, which is the most expensive option, but is the fastest alternative to truck, rail, or sea.  

2. Currently, IEWC freight is transported from Mexico:

  • Via a consolidation point from our U.S. locations to a third-party consolidation warehouse located in Laredo, Texas.
  • Once ready, entry is made and trucks pick up the freight and transport it over the U.S./Mexico border.

IEWC continues to closely monitor the border situation and has plans in place to deal with potential trade disruptions. As with other recent trade-related challenges, we continuously review political, legal and logistic environments in order to respond quickly to mitigate the effects on our customers and suppliers.

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