Big reforms and administrative leadership changes have made it difficult for those in the shipping and logistics industry to get their bearings.
Everyone in the shipping and logistics industry knew that with the transition into a new Presidential administration and Congress, big changes were in store. Issues that directly affect the industry, from trade renegotiations, to immigration reform, to higher spending on border security, had been central to the 2016 elections, so disruption was always in the cards. What industry professionals were not sure about was the level of change.
One of the first significant changes came early, with President Trump’s executive order banning travelers from eight Muslim countries from entering the U.S. The travel ban was eventually struck down by the 9th circuit court, and a subsequent, more scaled-back version of the executive order is currently stuck in a similar court battle.
This state-of-affairs has put a strain on shippers as well as travelers. Not only do they feel the pinch while trying to move cargo smoothly through Customs (tougher physical package checking has become the norm, which was to be expected), but also in their networking and business relationships.
According to sources within various air cargo groups, the upcoming convention season has seen a noticeable decline in RSVPs from members coming from the Middle East. This has not been due merely to concern on their part, but also from American consulates limiting the number of visas normally given to individuals from that region.
Meanwhile, the Transportation Security Administration (TSA) is without a permanent agency head. The Airforwaders Association (AfA) has recently come out urging President Trump to nominate a new leader.
According to the AfA, a TSA administrator could finalize changes to the Indirect Air Carrier Standard Security Program, which would optimize the security detection at certified screening facilities run by air forwarders.
The AfA had also lobbied President Trump to appoint a permanent head of U.S. Customs and Border Patrol (CBP), noting that a CBP Commissioner could push forward the Known Shipper Program, which would streamline the verification process for shippers, especially in the new ecommerce-driven environment. In a move that should make the AfA (and shippers in general) breathe with a little more relief, the President has recently nominated acting Deputy Commissioner Kevin K. McAleenan to the position of official commissioner for the agency. He has also nominated Mira R. Ricardel to the position of undersecretary of the Commerce Department’s Export Administration (which oversees export licensing and controls).
Hopefully, these appointments signal a broader stabilization across the board. These issues are only going to be exacerbated as new concerns over travel security come to the fore, as well as the fear of hardened trade barriers.
Strain at customs and the borders already have the potential to see large delivery companies shift costs to the consumer; if combined with high tariffs, the effect could be more painful than anticipated. That is something we should all seek to avoid.