US Logistics Update [Oct 4, 2025]-English

Updated: Oct 12

On October 1, the U.S. Congress failed to agree on a budget bill, causing the federal government to enter a shutdown for the first time in seven years. Hundreds of thousands of government employees were furloughed, paralyzing many government functions. Federal government shutdowns have become routine, not unusual occurrences. Accordingly, all federal departments have guidelines prepared for shutdowns, but President Trump is altering these guidelines, worsening the situation. He is particularly threatening to permanently lay off non-essential federal employees. During a federal government shutdown, the release of various statistics by the Bureau of Labor Statistics is delayed. The Federal Reserve, facing significant pressure for additional interest rate cuts due to recent employment deterioration, cannot adjust rates without official statistics at the Federal Open Market Committee (FOMC) meeting scheduled for October 28-29. The Fed's response is therefore closely watched.

Meanwhile, the national debt ceiling issue, which has always been a sticking point in budget

negotiations, saw the statutory debt limit raised by approximately $5 trillion to $41.1 trillion through

the “One Big Beautiful Bill Act” (Budget Reconciliation Act) passed on July 4, 2025. Therefore, this

shutdown does not pose a risk of default on Treasury bonds, and market reaction has been

relatively muted.

President Trump signed an executive order on October 14 imposing tariffs on wood, upholstered furniture, kitchen cabinets, and bathroom vanities. As a result, wood will be subject to a 10% tariff, while furniture, kitchen cabinets, and bathroom vanities will face a 25% tariff. Meanwhile, the temporary US-China trade agreement imposing a total 30% tariff on Chinese imports into the US expires on November 10, 2025. If no agreement is reached by then, tariffs on Chinese goods are set to surge again to a total of 54%. In an interview with CNBC, Treasury Secretary Scott Bessent mentioned the APEC summit in late October, which President Trump and President Xi Jinping will attend, stating he expects “a fairly significant breakthrough.”

Bloomberg reports that LG Energy Solution will resume dispatching workers to the U.S. after the Chuseok holiday. This follows confirmation that “B-1 visa and ESTA holders can perform equipment installation, inspection, and maintenance at U.S. factories,” marking a complete reversal of U.S. immigration authorities' policies that had led to large-scale arrests and detentions.

Despite minimal growth in employment and working hours over the past three months, the U.S. economy recorded a remarkable 3.8% GDP growth rate in the third quarter, sparking diverse interpretations. It is unusual for GDP and employment to diverge so sharply. Possible explanations include: 1) Errors in recent GDP or employment data, 2) A slowdown in GDP growth or job creation that could resolve the discrepancy, or 3) A productivity boom. Some cautiously speculate that an AI-driven productivity surge might be the cause. Meanwhile, Goldman Sachs CEO David Solomon stated that the U.S. economy is expected to accelerate its growth entering 2026, as technological investments and sustained federal economic stimulus measures are stronger than labor market slowdown and geopolitical uncertainty.

Impact of the U.S. Federal Government Shutdown on Logistics
Despite the federal government shutdown, employees of the Customs and Border Protection (CBP), which is classified as a core essential agency, remain on duty. However, thousands of support staff and certain agencies, such as the International Trade Administration (ITA) reviewing cases related to anti-dumping and countervailing duties (ADCVD), are on furlough. While tariff collection continues normally, ITA-related operations, duty refunds, perishable inspections, pharmaceutical inspections, and other tasks requiring additional staffing face delays. During the 2018-19 shutdown, vessel dwell times at the ports of Los Angeles and Long Beach increased by 15-20%.

Montreal Follows Vancouver in Imposing Empty Container Fees
The Montreal Port Authority (MPA) has begun imposing a one-time fee of C$10 per empty export container (TEU) as of September 30. Vancouver had already implemented a C$17.58 per TEU charge starting May 1. In Vancouver, the system applies half of the terminal usage fee for loaded export containers (C$35.15 per FEU) to empty containers as well. However, industry stakeholders are pushing back, arguing that terminal usage fees should reasonably be applied only to loaded containers.

Air Cargo Market Diversifies Post-Tariffs with ‘US-plus one’ Strategy: TIACA
As global trade flows are being restructured by the U.S.‘s broad tariff policies, manufacturers are expanding the 'US-plus one’ approach in their production strategies, diversifying air cargo routes. This is a positive signal for the entire industry, stated Glyn Hughes, Secretary General of the International Air Cargo Association (TIACA), during a webinar hosted by Xeneta. He assessed, “Airlines are responding nimbly by reallocating supply as the geographic axis of demand shifts due to U.S. policy changes,” adding, “While ‘China-plus one’ gained attention in recent years to reduce supply chain risks, discussions around ‘U.S.-plus one’ from a consumption perspective have become more prominent recently.” Hughes further projected, “In this environment, production shifts to parts of Southeast Asia and diversification of consumer markets will accelerate,” adding, “As production and consumption hubs increase, more opportunities arise for air cargo.” The industry expects these structural changes to enhance route portfolio and supply chain flexibility, acting as a medium-to-long-term growth driver.