Aviation, Trade Sectors Brace for Government Shutdown

Agencies will be stretched to keep functioning at normal levels, businesses fear.

Air traffic controllers will have to report to work next week knowing that they may have to go without a paycheck until Congress appropriates money for the new fiscal year. [Credit: Shutterstock/Gorodenkoff]

Editor's Note: this article first appeared on FreightWaves.com.

WASHINGTON — Aviation and logistics industry officials are frustrated with lawmakers’ inability to fund the government beyond this Saturday and say there will be real-world consequences for commerce if agencies are forced to halt all nonessential services at the end of the month.

Airlines will continue to fly and goods will be able to flow through land and sea ports as front-line Customs and Transportation Security Administration personnel stay on the job without pay, but shortages of workers, especially for support functions deemed nonessential, could reduce processing efficiency and delay travelers and shipments. Other consequences could extend beyond the immediate term as programs and activities important to businesses get halted.

“We’re heading into the busiest time of year for the supply chain when you need things to work. Yes, volumes are down, but we’re up against pretty firm deadlines with lots of new product introductions from a variety of companies and lots of shipping going on. Government should function like a well-oiled machine,” said Neel Jones Shah, executive vice president of air strategy and carrier development at Flexport.

The FAA will furlough more than 17,000 employees on Sunday if Congress doesn’t pass a short-term continuation of fiscal 2023 funding, according to a shutdown plan for the Department of Transportation. The FAA will continue to provide air traffic control, hazardous material inspections and airworthiness directives, and it will maintain navigational aids. But activities related to airport infrastructure investments, aviation rulemaking, facility security inspections and development of new navigation technologies will cease.

Transportation Secretary Pete Buttegieg said on CNN that a shutdown will prevent hiring and training more air traffic controllers when the system is experiencing a 3,000-person shortfall that has contributed to severe flight delays in the past year.

“A government shutdown would reduce federal safety oversight, strain airport security, delay much-needed infrastructure and planning projects, and furlough thousands of hard-working public servants,” said Greg Regan, president of the Transportation Trades Department of the AFL-CIO, in a letter sent Wednesday to members of Congress. “To be clear: transportation systems and federal workers are not the only ones who will be affected by a shutdown. A shutdown affects the entire country and your constituents will also suffer the consequences as the public transit, passenger rail, and aviation systems they rely on are thrown into havoc.”

Some stakeholders expressed concern that some federal employees may self-furlough, or call in sick, because they may not want to work without getting paid.

“In terms of resiliency and motivation of a workforce, particularly when there have been staffing challenges with air traffic control at the FAA, that’s not a conducive environment for retaining a motivated workforce or recruiting,” Lauren Beyer, the new president of the Cargo Airline Association, said in an interview earlier this month on the sidelines of an aerospace policy summit here organized by the U.S. Chamber of Commerce. 

Airline executives also said they are dismayed that Congress has yet to pass legislation reauthorizing funding for the FAA, which is also set to expire on Saturday. House and Senate committees with jurisdiction over aviation in June introduced bipartisan versions of bills to update the agency’s programs for the next five years. The current road map allowed for $96.7 billion over six years. Policy watchers say the most likely outcome is a short-term, pro-rated extension of the current road map, which allowed for $96.7 billion over six years.

The House FAA reauthorization bill would provide $104 billion in funding for the FAA over five years, a 7.5 percent increase over the current law. The Senate bill calls for a 10.6 percent increase to $107 billion. 

The House passed its legislation in July, but the Senate has yet to complete edits to its legislation because of disagreements over amendments that would change the number of flying hours required to obtain a pilot’s license and add slots to Reagan National Airport, which serves the Washington metropolitan area. 

The FAA needs more resources to do its job, airline executives say.

“The frustrating thing from an airline perspective is we’re not even talking about modernization. We’re talking about let’s staff for the technology we have today. Let’s get enough controllers hired, let’s get them through training, let’s get them fully qualified so we can manage the system,” said Hawaiian Airlines CEO Peter Ingram on stage at the event. “I’d love to be talking about modernization, but it’s just about catching up because we have a deficit in many places in the country in staffing.”

A simple extension of FAA funding at current levels would be “an opportunity lost,” Ingram told FreightWaves. He and American Airlines CEO Robert Isom also called for swift approval of a permanent FAA administrator providing leadership so the air traffic control system can be modernized and operated more efficiently.

President Joe Biden recently nominated former Deputy Administrator Michael Whitaker for the job.

“The air traffic control is understaffed throughout the country. The current hiring plans aren’t making a big enough dent in that, and we really need to see hiring and training going on at a faster pace so that we’re not only keeping pace with the retirements, but we’re filling the deficits of air traffic controllers that are in place at many centers across the country,” Ingram said.

For importers and exporters, the concern is that U.S. Customs and Border Protection inspectors may not have the ability to consult import specialists to determine if certain entries are in compliance and that partner agencies, such as the Consumer Product Safety Commission, may be short personnel to sign off on certain imports. 

The National Customs Brokers and Forwarders Association of America rallied 40 trade associations to sign a petition calling on agencies that regulate cross-border trade to stay in close touch with industry representatives so problems clearing shipments can be quickly resolved.

CBP has established a “war room” to monitor imports and exports at ports of entry and address bottlenecks.

The groups asked for a direct line of communication to the incident-response team and for CBP to invite partner government agencies, such as the Food and Drug Administration, to send staff to the meeting site. The trade community also urged Customs to ensure technical support for the Automated Commercial Environment, the portal through which imports and exports are reported to the government, so it continues to operate normally.

CBP should also pre-plan how industry-focused import centers coordinate with the local ports to prevent unnecessary slowdowns in moving shipments, the message said.

Eric is the Air Cargo Market Editor at FreightWaves. An award-winning business journalist with extensive experience covering the logistics sector, Eric spent nearly two years as the Washington, D.C., correspondent for Automotive News, where he focused on regulatory and policy issues surrounding autonomous vehicles, mobility, fuel economy and safety. He has won two regional Gold Medals from the American Society of Business Publication Editors for government coverage and news analysis, and was voted best for feature writing and commentary in the Trade/Newsletter category by the D.C. Chapter of the Society of Professional Journalists. As associate editor at American Shipper Magazine for more than a decade, he wrote about trade, freight transportation and supply chains. Eric is based in Portland, Oregon. He can be reached for comments and tips at ekulisch@freightwaves.com

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