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October 14, 2013 3:45 AM, EDT

U.S. Military Freight Dwindles as Govt. Shutdown Continues

By Michele Fuetsch, Staff Reporter

This story appears in the Oct. 14 print edition of Transport Topics.

The two-week-old federal government shutdown has brought business with the U.S. military to a near standstill, according to several fleet executives.

Work has been dramatically curtailed because the civilians who normally process deliveries to military installations were among 800,000 federal employees furloughed by the shutdown that began Oct. 1.

The U.S. military is a major fleet customer and spent an estimated $1.9 billion on truck transportation in the continental United States last year, according to American Trucking Associations estimates.

“Prior to the shutdown, the average offering per day was 300 shipments,” said Leland Karras, executive director of government accounts with ABF Freight System. “After that, it dropped to an average of 100.”

“For ABF, government’s a small piece of the pie, but for some of the other carriers for whom the Department of Defense is their primary customer, it’s probably going to be pretty tough for them,” said Karras, chairman of American Trucking Associations’ government traffic policy committee.

At Chalich Trucking Inc. in Ramsey, Minn., whose 17-unit fleet hauls ammunition and explosives, all 34 team drivers have been sent home, said owner Cheri Cook.

“That’s the worst part about it,” Cook said. “You have such a hard time keeping them anyway, and now this happens. It’s not fun.”

Normally, Chalich averages 120 loads a month of munitions, she said.

The story is the same at Prestera Trucking Inc. in South Point, Ohio, said owner Dan Jeffries.

“On the average, we’ll do about 15 loads per day for the military” he said. “Since [Oct. 3] we’ve picked up two loads.”

Jeffries said military ammunition shipments account for 70% of his business, so he, too, has idled drivers.

“A lot of the drivers who were approaching downtime or vacation . . . that catches them up on home time, but it doesn’t catch us up on revenue,” he said.

One Prestera trailer last week was full of munitions and sitting at a military base because there was no one to unload it, Jeffries added.

“We now have limited distribution of ammunition for high-priority requirements,” Justine Barati, chief of public affairs for the U.S. Army Joint Munitions Command, told Transport Topics. “We anticipate this tempo continuing until a budget resolution is reached.”

In an effort to stem their losses, every carrier in the government service sector is out looking for freight in the commercial sector, said Bill Wanamaker, ATA’s director of government traffic and security operations.

Elsewhere, port officials on both coasts said freight was still being loaded and unloaded without interruption. U.S. Customs and Border Protection did not furlough inspectors, who are exempt because they are necessary to national safety and security.

Likewise, the two federal agencies supported almost 100% by the Highway Trust Fund — the Federal Motor Carrier Safety Administration and the Federal Highway Administration — have continued to do business during the shutdown with their full roster of employees on the job.

The uncertainty of the shutdown, however, is weighing heavily on carriers still recovering from the recession.

The shutdown has slowed or halted the approval of home mortgages, a new worry for the moving and storage sector, said Paul Oakley, senior vice president of government and military affairs at the American Moving and Storage Association.

“That means people may have already set up arrangements to move a month down the line, and those are all being disrupted,” Oakley said.

The shutdown is bound to hurt the economy, said Ted Lepski, a director at Boasso America Corp. Lepski founded tank-truck firm Greensville Transport Co. and recently sold it to Boasso.

Despite a driver shortage, Lepski said, the shutdown has convinced him to hold off hiring any new drivers.

“I think smart folks are starting to ask what impact this is going to have a few months from now,” Lepski said. “Uncertainty is a horrible thing. We look for the tea leaves in every news story to find out what’s going on and what can we do best to shelter ourselves in the coming months.”