First it was the fiscal cliff and now its the sequestration. The inability of the federal government to find a long term solution to the nation’s budget woes finds the relocation industry in the cross hairs of another budget quagmire. The sequester or sequestration refers to budget cuts to particular categories of federal spending that began on March 1, 2013 as an austerity fiscal policy. The cuts were enacted by the Budget Control Act of 2011 and initially set to begin on January 1 but that date was postponed by two months by the American Taxpayer Relief Act of 2012. The spending reductions are approximately $85.4 billion during fiscal year 2013.
Lately the news has been dominated by the sequestration’s effect on the airline industry. Tens of thousands of fliers faced delays, missed connections and canceled flights, as spending cuts forced unpaid leave for air traffic controllers. Certainly this does effect relocation because of the inconvenience encountered while taking home finding trips, return visits home and final move flights. The other negative effect of sequestration is perhaps larger and more costly; the international shipment of household goods and effects.
Customs and Border Protection (CBP), as part of the sequestration order, is expected to cut approx. $745 million from its budget in order to comply. CBP employees will most likely face furloughs and the agency predicts a reduction in staff. As a result shipping processes will take more time and industry professionals should adjust their expectations and help clients and international transferees prepare for delays in paperwork, longer clearance times and increased wait times at border entry points. Border employees will no longer be able to work overtime to clean up backlogged examinations and document reviews; air shipments might also being impacted. We’re advising our clients to prepare for the possibility of increased international household goods shipment costs until a government solution is found to the sequestration.