Record US Shutdown: Freight and Economy Nearing Crisis?

The US government shutdown has become the longest in history, reaching its 36th full day on Wednesday. 

Supply chains across the country are now showing real signs of pressure as key federal services tied to transport and inspection have come to a halt. 

Certification delays, aviation slowdowns and disrupted cargo clearances are all feeding into what analysts warn could become a prolonged economic drag, if the political deadlock continues. 

Although the US Customs and Border Protection (CBP) is maintaining tariff collection and basic port operations, logistics operators face delays due to gaps in support from other government agencies. These include departments responsible for agricultural certifications and other regulatory checks, which are crucial for cross-border cargo movement.

Oxford Economics warns: “A prolonged government shutdown could cause backlogs for supply chains, especially if there is a rise in absenteeism at agencies responsible for cargo inspection.”

Ports are continuing to operate, but not at full capacity. The absence of "non-essential" federal staff continues, meaning inspection hold-ups delay the release of goods at port, with knock-on effects for lorries, rail freight and warehousing. 

Meanwhile, the aviation supply chain has hit a bureaucratic snag of its own. 

Texas-based Mammoth Freighters' long-haul cargo aircraft certification is facing disruption, as the Federal Aviation Administration (FAA) lacks the staff to keep pace with its review. The large converted Boeing 777-200LRMF, is under contract with Qatar Airways, but delays mean no clear delivery date.

Mark Drusch, Chief Cargo Officer at Qatar Airways, explains: “The US government shutdown means that the certification process has slowed down. 

“We need to see how much work can get done and how long the shutdown will be to determine when we get [the 777-200LRMF]. Right now, we are assuming that we get the first aircraft in January.”

Brian McCarthy, VP of Marketing and Sales at Mammoth, remains cautiously optimistic: “We are now fully engaged with the FAA, and they do have representatives working on this programme for us at this very moment.”

FAA cuts air travel

In the air, the FAA has begun scaling back operations to cope with mounting pressures. 

With roughly 13,000 air traffic controllers and 50,000 Transportation Security Administration (TSA) staff working without pay, Transportation Secretary Sean Duffy announced a 10% flight reduction at 40 of the largest US airports.

“Our job is to make sure we make the hard decisions to continue to keep the airspace safe,” says Sean. Delays and cancellations already affect more than 3.2 million passengers, with Airlines for America reporting widespread disruption due to staffing shortages.

Air traffic controllers and TSA officers are classed as essential workers, so they are required to report to duty without pay until the government reopens – raising concerns about burnout and attrition. 

The Secretary adds: “You will see mass flight delays. You'll see mass cancellations and you may see us close certain parts of the airspace, because we just cannot manage it because we don't have the air traffic controllers.”

Bryan Bedford, Head of the FAA, adds: “When we see pressures building in these 40 markets, we just can't ignore it. We can take action today to prevent things from deteriorating so the system is extremely safe today, will be extremely safe tomorrow.”

The FAA does not name the 40 airports, but aviation analytics firm Cirium estimates that up to 1,800 flights and more than 268,000 airline seats could be lost daily from key hubs including New York, Washington DC, Chicago, Atlanta, Los Angeles and Dallas.

Cargo and consumers face ripple effects

The aviation and port bottlenecks are raising broader concerns for economic growth. 

Freight markets, which were already cooling after an early peak season, now face renewed uncertainty. 

Oxford Economics notes an oversupply of freight carriers may prevent inflationary pressure in the short term, but warns of potential disruption if delays continue. The consultancy says looming sectoral tariffs in key industries such as semiconductors and pharmaceuticals could also “whipsaw” already stretched supply chains.

Meanwhile, certification setbacks threaten long-term freight capacity - as in Mammoth’s case. 

Mark Zandi, Chief Economist at Moody’s Analytics, says: “The economy is fragile and, therefore, something like a government shutdown could become a bigger problem a lot faster than people might think.”

Joe Brusuelas, Chief Economist at RSM US, echoes this: “This isn’t economic activity that is just deferred or delayed, you’re now creating a condition of economic activity that just simply doesn’t happen.”

Consumer confidence, transport infrastructure and certification capacity are all showing signs of stress. 

With Congress locked in partisan gridlock, analysts warn the longer the shutdown lasts, the more likely the supply chain - and the economy - hits breaking point.