The US federal government entered a shutdown on October 1, 2025, after members of Congress failed to agree on budget spending plans. While essential agencies continue operating under contingency plans, the impact on logistics and cross-border trade is already visible - and it's likely to grow sharper by the day.
Customs and Border Delays
US Customs and Border Protection (CBP) is one of the few agencies that must keep operating during a government shutdown. Revenue collection, inspections, and cargo clearances continue, but the workforce is stretched thin.
With tens of thousands of federal employees working without pay, morale and retention risks loom. Lower-priority inspections and secondary reviews are already being deferred, creating longer lines at major ports of entry.
Tariffs Hit Home: How US Trade Policy is Upending Global Logistics
The effect is particularly acute along the US–Mexico and US–Canada borders, where trucks are waiting longer to clear. Perishable goods face the highest risk of spoilage, while carriers are absorbing extra costs tied to idling equipment and driver detention.
Regulatory Bottlenecks
The shutdown’s reach extends beyond customs gates. Export licensing, permits, and classification requests handled by agencies such as the Department of Commerce’s Bureau of Industry and Security are being delayed. For industries like aerospace, defense, and pharmaceuticals, where shipments often require pre-clearance or specialized authorizations, cargo is likely to get stuck in limbo.
These bottlenecks don’t just slow exports. Importers also face challenges when goods require FDA or USDA approvals. While “essential” food safety and inspection services continue, non-urgent reviews are slipping, adding uncertainty to delivery timelines.
Freight Modes Under Stress
Freight continues to move, but cracks are forming across modes:
Trucking: Hiring and compliance checks that require federal processing are increasingly on hold, slowing capacity growth. Truckers at the border are starting to face long idle times, squeezing profit margins.
Rail: While railroads operate on private funds, delays at customs stalls handoffs with Canadian and Mexican partners, leaving cars idle and disrupting schedules.
Air cargo: FAA controllers and TSA screeners remain on duty, but unpaid. Already, unions warn of fatigue and attrition if the shutdown drags on. Certifications for new aircraft and routes are suspended, choking off growth in an already tight air freight market.
Warehousing and Inventory Pressures
Downstream, warehouses are just beginning to feel the strain. Slower flows mean congestion, unplanned storage costs, and re-routing headaches. Moving forward, companies will be forced to carry higher buffer stocks to hedge against unpredictable transit times, tying up working capital and reducing supply chain flexibility.
The Hidden Tariff of Uncertainty
The shutdown hasn’t brought logistics to a halt, but uncertainty is its own kind of tariff. Companies are beginning to pad lead times, reroute shipments, and renegotiate delivery commitments. All of this raise costs. Analysts warn that if the shutdown lasts weeks rather than days, the cumulative effect could erode billions from trade and GDP - US$7 billion per week according to some estimates.
Looking Ahead
In the short term, freight will keep rolling. But with every delayed permit, every missed inspection, and every fatigued customs officer, efficiency erodes.
Logistics thrives on predictability, and right now, predictability is in short supply. For US trade corridors, the longer the shutdown drags on, the heavier the cost of doing business across borders.
Read More: Air Cargo Tonnages Up 3% in First Quarter of 2025 Ahead of New US Tariffs