After the federal government failed to come to an agreement on a plan to cut spending and reduce the national debt, a series of automatic spending cuts kicked in. Though their full effects have yet to be experienced, it is possible companies could soon notice a change in their procurement or shipping policies as a result of the budget cuts.
The Federal Aviation Administration recently announced it will be forced to close 149 air traffic control towers, a move it claims is a cutback necessary to meet the organization's sequester-imposed spending cuts of $637 million. The plan will take effect April 7 and start off by closing towers at small airports across the country.
A potential problem for businesses
This move could pose difficulties for companies that rely on shipments that arrive in these airports. The closed control towers will require pilots to use their radios to schedule takeoffs and landings, with no outside assistance. Many fear this could lead to delays, rerouted aircrafts or accidents, all of which could have a significant impact on businesses relying on planes carrying product or raw materials to these airports.
"We've heard from communities across the country about the importance of their towers and these were very tough decisions," said Ray LaHood, secretary of transportation of the United States. "Unfortunately we are faced with a series of difficult choices that we have to make to reach the required cuts under sequestration."
To mitigate the risks associated with the closed control towers, some enterprises could take the initiative to have their products shipped to a different airport, requiring a change in logistical strategies and potentially increasing costs. Others could change their practices entirely, instead relying on trucks or cargo ships to transport their materials to reduce the potential problems that could be seen as air traffic control towers close.