U.S. importers face severe delays in getting their cargo cleared at major seaports and at the Canadian and Mexican borders because federal sequestration will reduce Customs and Border Protection manpower.
Container examinations at seaports could take an extra five days or more, and the agency warns of “significant daily backups for truck shipments at land ports.” Importers that are members of trusted trade programs such as the Customs-Trade Partnership Against Terrorism and Free and Secure Trade can expect their shipments to clear faster.
Because of the automatic $85 billion in federal budget cuts that took effect Friday, Customs will furlough workers, reduce overtime and hold off on hiring, resulting in the loss of several thousand of workers at ports of entry, said David Aguilar, head of the agency, in a March 2 letter to shippers. The agency’s budget for core functions will be cut by about 5 percent, or $512 million, according to the latest White House projections.
“Our security efforts will remain our highest priority. We will not allow degradation of our primary anti-terrorism mission,” Aguilar wrote. “We will prioritize core processing and facilitation operations for both travelers and cargo.”
Thomas Barnes, president of Con-way Mulitmodal, said on Friday that Customs clearance at the Mexican border hadn’t slowed ahead of sequestration and the company was monitoring the situation to best route shippers’ cargoes. Roughly 35 percent of Con-way’s truckload business originates from or is destined to Mexico. The slower waits at the border will likely spur shippers to shift more loads on the expanded intermodal networks. Barnes described the Customs process at the U.S.-Mexico as “status quo” with some shipments taking a day or two to clear.
“I think the system needs a deep evaluation and overhaul,” he said. “The Customs process lacks the sophistication needed, and it’s going to be even more important to improve it as trade grows.”
The sequestration could also hamper the agency’s implementation of the Automated Commercial Environment, a long-delayed cargo processing system. Gaining more funding in the fiscal 2014 budget is key to finishing up the system that acts an umbrella for all Customs’ communications with importers, brokers and exporters. The federal sequestration could also slow the momentum of the Beyond the Border Initiative, an effort by U.S. and Canada to speed the movement of goods and people across the border.
The anticipated slowdown in processing cross-border shipments comes as U.S. trade with its neighbors, particularly Mexico, experiences healthy growth. U.S. trade growth with its North American Free Trade Agreement partners in December slipped 3.2 percent year-over-year to $71.9 billion, largely because a decline in the expansion of truck and pipeline shipments. NAFTA trade ended the year up 6.2 percent from 2011, according to the Bureau of Transportation Statistics.