Last night President Trump released a proclamation that imposes travel restrictions from Europe to the U.S. in an effort to slow down the fast-spreading coronavirus outbreak.
During his televised speech, he simplified his proclamation and misspoke at one point. In doing so, the President created some confusion about who and what it impacts.
Even quickly written news stories on the travel restriction mischaracterized the proclamation and how it may impact U.S. travelers and businesses.
Now that the proclamation is posted online, let’s take a look:
- The proclamation covers all foreign nationals but generally exempts U.S. citizens and foreign nationals with U.S. Permanent Residency status (“Green Card”). Some additional screenings may be possible. There are a few other exempted groups in the travel policy.
- Foreign nationals that visited a Schengen area country are barred from visiting the U.S. for 14 days. Schengen area countries include 26 European countries but do not include the U.K., Ireland, and a few other EU countries. In his televised speech, he appeared to exclude U.K. citizens. However, as the proclamation is written, U.K. citizens are actually included if they visited a Schengen area country within 14 days of their planned travel to the U.S.
- Also, in his televised announcement, Trump misspoke when he talked about the movement on goods between Europe and the U.S. He quickly clarified his remarks on Twitter by saying, “…very important for all countries & businesses to know that trade will in no way be affected by the 30-day restriction on travel from Europe. The restriction stops people not goods.”
- The President said this is a 30-day travel restriction, but the proclamation has no specific end date as it states, “This proclamation shall remain in effect until terminated by the President.” However, he did say on TV he would review this policy as the situation warrants.
- Another critical point to clarify is that the U.S. has not placed any restrictions on people, regardless of citizenship, to travel from the U.S. to Europe. Of course, this is subject to change if the Europeans feel they need to reciprocate.
Impact on Movement of Goods
Since people are necessary to move goods, what are the implications of this travel restriction on air cargo, including mail services, FedEx, UPS, and DHL?
As U.S. citizens and lawful permanent residents are already excluded, many U.S. based UPS, FedEx, and DHL pilots will not face restrictions. Equally, most aircrews on U.S. flagged commercial airlines and air cargo operators are automatically exempt for the same reason.
But what about foreign-based air cargo and commercial airlines? For this answer, it is important to look at the exemptions in the proclamation.
Section 2, (vii) states, “any alien traveling as a nonimmigrant pursuant to a C-1, D, or C-1/D nonimmigrant visa as a crewmember or any alien otherwise traveling to the United States as air or sea crew;”
The President is trying to make sure that most air and sea crew that regularly travel to the U.S. are exempt from this policy to mitigate the disruption of international trade.
As he clarified on Twitter, he does not want to stop or restrict the movement of goods and trade between the U.S. and Europe, just the movement of people.
But There is A Real-World Reality
While the impact on cargo carriers is very minimal, commercial passenger airlines will likely suspend many flights, further reducing air cargo capacity.
Online merchants that have existing relationships with UPS, FedEx, and DHL will likely see minimal impact on shipments.
FedEx carries much of the U.S. Postal Service airmail, but they do use some commercial airlines as they recently warned of delays on shipments to China.
Smaller-sized air cargo that is typically transported by commercial airlines will probably see the biggest impact.
Commercial airlines make their money flying people, so these travel restrictions are going to reduce the number of flights between the U.S. and Europe as passenger demand dwindles and airlines reduce flights.
If merchants rely on air cargo for supply or order fulfillment, prices are likely to rise due to the diminished cargo capacity, and businesses should also expect longer transit times.
Losing commercial airlines for air cargo will require shippers to shift shipments to other carriers such as UPS, FedEx, DHL, and pure air cargo carriers.
How much excess capacity may exist with those carriers to pick up the slack from the commercial airlines is a really good question. Using the previously mentioned USPS example, it seems there wasn’t much available to go to China.
Shippers that are customers of UPS, FedEx, and DHL will likely feel the least pain as these companies want to take care of their customers first.
Trying to sign up now with one of these carriers may not result in the best prices. It is doubtful carriers feel the necessity to give up huge discounts to gain business at this time.
How do you think this travel restriction between Europe and the U.S. is going to affect your online business?
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