April 4, 2019

Retailers and 3PLs brace for closure of U.S.-Mexico border

Traders update business continuity plans as White House dials back threats to close border.

By Ben Ames

Retailers and logistics service providers are making plans to cope with potential business disruptions that could result if President Trump acts on his threat to close the U.S. border with Mexico. The President has issued a series of statements in recent days with variations of conditions and deadlines for that step, leaving businesses unsure of future policy.

In a statement Wednesday, the President tweeted "Congress must get together and immediately eliminate the loopholes at the Border! If no action, Border, or large sections of Border, will close. This is a National Emergency!" By today, Trump had dialed back that threat, saying he would delay closing the border for one year, according to published reports.

In an alert to its customers, Overland Park, Kan.-based third party logistics provider (3PL) MIQ Noatum Logistics warned that delays are expected at the U.S.-Mexico border, in reaction to escalating actions by U.S. Customs and Border Protection (CBP) to turn back migrants attempting to enter the U.S. from the south. "As CBP repositions officers to deal with the immigration issues, the threat of closing the border completely to trade and immigration has been proposed and is being considered by the U.S. administration," MIQ said in the note. "Businesses should begin to evaluate their business continuity plans should the border be closed to trade."

CBP has already notified the trade community to expect increased wait times as a result of lane closures across the nation's Southwest border ports of entry, MIQ said, citing a March 27 statement by CBP Commissioner Kevin McAleenan. In Texas alone, a CBP web portal that estimates wait times at various ports of entry listed delays on Thursday of 120 minutes at El Paso, Texas' Bridge of the Americas, 190 minutes at El Paso's Ysleta point of entry, and 180 minutes in Laredo, Texas.

In reaction, the National Retail Federation (NRF) said today that a potential border closure could have worse impacts than simply triggering delays. Rather, a closure would hurt U.S. retailers, workers and consumers by imperiling the $1.7 billion daily U.S. trade with Mexico in items such as fruits and vegetables, electronics, appliances, auto parts, apparel and more, the NRF said.

"Closing the border for any length of time would result in significant supply chain disruptions for U.S. retailers," NRF President and CEO Matthew Shay said, in an open letter to the Trump Administration. "These disruptions would reverberate throughout the supply chain, impacting everyone from truckers to warehouse workers whose jobs depend on the two-way trade with Mexico. The end result would be job losses, factory shutdowns, increased consumer costs and reduced product availability across the country."

The U.S. Chamber of Commerce joined that opinion, saying in a March 29 statement that closing the U.S.-Mexico border would produce "an economic calamity" by freezing the massive flow of trade between the two nations, including $265 billion in U.S. exports and $300 billion in U.S. imports in 2018. "Closing the U.S.-Mexico border is not an option. It would be an unmitigated economic debacle," the group said.

According to the Chamber of Commerce, a better way forward would be for Washington to commit itself to approving the U.S.-Mexico-Canada Agreement (USMCA). "Instead, let's all roll up our sleeves, secure the border, fix our broken immigration system, work to stabilize the situation in Central America, and ensure lasting and shared North American prosperity by securing congressional approval of the Trump administration's landmark U.S.-Mexico-Canada Agreement (USMCA)," the chamber's statement said.

About the Author

Ben Ames
Senior Editor
Ben Ames has spent 20 years as a journalist since starting out as a daily newspaper reporter in Pennsylvania in 1995. From 1999 forward, he has focused on business and technology reporting for a number of trade journals, beginning when he joined Design News and Modern Materials Handling magazines. Ames is author of the trail guide "Hiking Massachusetts" and is a graduate of the Columbia School of Journalism.

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