The likelihood of United States government shutdown again up on us. The pattern of last minute deals to avert a shutdown is disturbing. Short term deals with regular threats of a shutdown. A scenario that could interrupt key federal services including customs import.
For e-commerce merchants importing parcels to the USA, we recommend using Express Consignment Clearance Facilities (E.C.C.F's).
A black swan event defined. The US government shutting down for an extensive period can be referenced as a black swan event. Highly unlikely. Yet, in hindsight, very predictable and not so surprising.
Even a relatively short shut down will result in significant delays. Our estimate is that for every week the government is shut down will create a months long delay. Similar to import flows following Covid with unprecedented delays. Even if customs import is consider a critical activity and funded, delays will occur elsewhere in the system.
* Items imported as "express consignment" are more likely to be viewed as a critical service (and thus continue to be funded).
* ECCF's are self funded: Express Consignment Operators (ECO's) reimburse customs for the cost of custom's express teams.
Disclaimer: The information in all Jet Worldwide online content, including this post, is for general information only.
How to Prepare your cross border e-commerce imports for possible US Government Shutdown?
- Take any threat of a shutdown seriously: Send existing shipments as soon as possible in advance of a threatened shutdown
- Ask customers to move up their orders whenever possible
- Store additional critical items in US warehouses
- Prepare a shipment/ data protocol to be able to utilize an Express Consignment Clearance Facility should a the postal network experience clearance delays.
The threat of a government shutdown (or slowdown) have again receded but there’s no guarantee that the lawmakers will be able to halt a shutdown in the fourth quarter of 2017: The most critical period for e-commerce imports.
Contact our team for information setting up express consignment clearance.
The threat of a US government shutdown can now be considered a regular occurrence. The lesson from the extensive disruption in 2013 can offer some lessons.
>A review of the 2013 US Government shutdown:
During the 2013 shutdown, about 850,000 federal employees were furloughed immediately after funding ran out. Essential services were maintained but some back office activities had been slowed. Some Customs clearance activities were affected.
An important point to remember is that US Customs and Border Patrol are not the only agency necessary for clearance of many items. Products that require approval from these other government agencies may be delayed:
- U.S. Consumer Product and Safety Commission
- Food and Drug Administration
- Environmental Protection Agency
- Department of Agriculture
It has been reported during the last shutdown that some government agencies allocated limited resources only to essential or“critical functions”
Experience in the past proves that even a short disruption is compounded by a seeming endless backlog that takes much longer to recover from than the initial delay itself. A week of uncleared items, for example, can take a month to clear out as existing flows just add to the existing backlog.
The battle over raising the debt ceiling - and threatened shutdowns - is becoming a regular part of the US political discourse. The politicians predictably play their hand up to the last minute and most observers feel confident that agreement will ultimately be reached.
However, with the massive volume of e-commerce parcels imported to the USA, even a small "slow down" can have a massive impact. Using an ECCF, while not a guarantee, remains the most secure method of importing high volume parcel flows to the USA.
