US Government shutdown delayed, but exporters should brace for Christmas disruption

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An 11th-hour deal means a potential US Government shutdown has been postponed until 17 November. However a long-term agreement looks further away than ever. UK exporters to the US should prepare for disruption before Christmas.

The US Government narrowly avoided a shutdown of many services after a stopgap funding deal was finally agreed on Saturday. The shutdown could have had an impact on UK-US trade and deliveries. However, the home delivery expert ParcelHero is warning that the deal may have only delayed the inevitable until 17 November.

With just hours to spare, the Republican House Speaker, Kevin McCarthy, managed to delay a Government shutdown for a further 45 days. Tens of thousands of US Government employees would have been put on furlough without pay and many federal services suspended from 00:01 ET (5am BST) on Sunday.

ParcelHero’s Head of Consumer Research, David Jinks M.I.L.T., says: ‘The short-term funding deal is good news for the US economy and everyone doing business with America. However, it has only kicked the can down the road – and a deal in November now looks even less likely to succeed.

‘The Government funding bill was narrowly passed in the House when McCarthy struck a deal with the Democrats, in defiance of the hard-line right in his own party. Rebel Republicans previously threatened to trigger moves to replace McCarthy if he were to make such a deal. Now they have started proceedings that could end in his replacement, possibly with a Speaker less willing to seek a compromise. If that happens, the chances of a funding deal on 17 November look even further away.

‘If there is a US Government shutdown after 17 November, it could have an impact on UK businesses and individuals sending products, gifts and mail to the US. That’s bad news leading in to the peak Christmas season. Some of the services which may be potentially affected are:

Mail

‘Many traditional UK Post Office mail services and certain economy courier services to the USA make use of the United States Postal Service (USPS) for final delivery. As such, there were some fears a shutdown could disrupt low-cost UK-US mail deliveries.

‘However, the USPS is funded through the sales of products (such as stamps) and services, and not directly by the US Government. That means deliveries should not be interrupted.

‘The US National Postal Mail Handlers Union says: “It needs to be emphasized that the Postal Service and its employees will not be directly impacted by a shutdown. The USPS is not an appropriated federal agency, and Mail Handlers will still receive pay checks and will still report to work.” US Post Offices should also remain open.

Customs and maritime shipments

‘The US Center for Strategic & International Studies (CSIS) says a potential shutdown “will hinder the work of Government agencies that contribute to the foreign commercial activities of the United States”. That list includes US Customs and Border Protection, the Department of Commerce’s Bureau of Industry and Security, the Department of Transportation and the Federal Maritime Commission.

‘CSIS says: “Essential work from agencies such as Customs and Border Protection’s cargo processing and inspection at ports, will continue, but functions less essential to day-to-day work but ultimately critical to these agencies’ long-term capabilities, like training activities, will be suspended.”

‘Likewise, Government activities related to imports and trade monitoring, such as tariff exclusion request processing, would likely cease.

Airfreight

‘Many UK products are airfreighted to America, often in the belly hold of passenger services. The US political news site The Hill reports that the US Transportation Secretary, Pete Buttigieg, has warned of potential disruptions in the airline industry, and highlighted the possible impact of a shutdown on air traffic control training:

A shutdown would include — just in the transportation side alone — shutting down air traffic control training at the exact moment when the country recognizes the need for more, not less air traffic control staffing, and when we have finally got cancellations back at or below normal rates. The air traffic controllers who would be working in the towers, they wouldn’t get paid. They’re under enough stress as it is doing that job without having to come into work with the added stress of not receiving a pay check.”

US services

‘Finally, during the last shutdown, nearly 90% of the Department of Commerce’s staff was furloughed and the International Trade Commission was closed. Any progress on the elusive US-UK free trade agreement would also be further hindered. ParcelHero’s USA page will give live information on all available services in the event of a US Government shutdown, as well as full details on Customs advice, sending food, prohibited items, etc.

‘The US is ParcelHero’s biggest individual overseas market. For expert advice on UK-US shipping, including Customs information, help for exports and prohibited items details, see: https://www.parcelhero.com/en-gb/international-courier-services/usa-parcel-delivery