The $85 billion worth of U.S. government budget cuts as part of the federal sequestration will hamper agencies key to processing cargo and building the infrastructure freight traffic depends on. In a larger sense, the cuts will likely dampen business and consumer demand, reducing the amount of freight that needs to be hauled by trains, trucks, vessels and airplanes.
The federal cuts, which took effect March 1, are just the first wave of the $1.2 trillion worth of spending reductions set to take place over the next 10 years. The remaining budget reductions will kick in unless Congress and the Obama administration solve the federal deficit crisis.
How sequestration will impact the U.S. economy and supply chains is fluid, so make sure to keep an eye on update and analysis via The Journal of Commerce.