Federal budget cuts could affect DOD loads, other trucking segments

By David Tanner, Land Line associate editor | 2/25/2013

Various federal transportation departments face automatic budget cuts March 1 unless Congress changes or delays its self-imposed deadline known as “sequestration.” The spending cuts could trickle down into various aspects of trucking, including Department of Defense, cross-border and air freight.

The U.S. Department of Transportation issued a memo this month to employees about the possibility of cuts that could include employee furloughs.

Departments of Defense, Justice and Homeland Security are among those on the list that could affect trucking businesses.

“Truckers who haul for the DOD will have already seen some impact, and that’s because that agency has already taken steps to reduce spending,” said Ryan Bowley, director of legislative affairs for the Owner-Operator Independent Drivers Association.

“Cross-border trucking could see longer lines, and folks who pick up at airports for air freight may likely see delays as well,” he said.

Third-party logistics provider C.H. Robinson issued a report about the effect of federal budget cuts on freight.

“Any furloughs or staff reductions at Customs, USDA port inspectors, and other agencies that inspect and clear cargo at sea and airports may slow down the release of goods being imported,” C.H. Robinson Government Affairs Manager Jason Craig stated.

Infrastructure, including highways and bridges, will not see cuts, at least over the short term, because Highway Trust Fund programs are exempt from the sequester.

“We’re not going to see highway projects stop immediately because of the sequester,” Bowley said, “but it could speed up the shortfall that the Highway Trust Fund is going to experience later on because of a reduction in the transfer amount to the Trust Fund from the General Fund.”

For the time being, the Highway Trust Fund is stocked through the end of fiscal year 2014. Bowley says beyond that, the sequester could take down the Trust Fund balance quicker than anticipated.

Also exempt from the sequester is the Federal Motor Carrier Safety Administration, which is funded by the Highway Trust Fund.

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