The US could be in for a $1.4 billion loss in logistics warehouse services in 2018 as the federal government grapples with a massive backlog of contracts and has no new contracts in the pipeline, according to a report.
The report, by the U.S. Chamber of Commerce and the National Association of Manufacturers, is the latest effort by the trade group to challenge the administration’s push to privatize the nation’s warehouses.
The government’s plan to sell off assets to private companies to use for transportation, distribution, and warehousing services has been met with fierce opposition from businesses and unions, who say the contracts are too costly for the U:y to maintain.
In its 2018 fiscal year budget request, the Trump administration outlined its plan to slash about $3.3 billion from federal warehouse contracts and sell off other services in an effort to reduce the federal budget deficit.
The plan, however, has not been approved by Congress, and the administration has said it will hold off on any action until lawmakers approve a plan to reinstate them.
Under the plan, the administration plans to reduce nearly $500 million in contracts that have been cancelled under the previous administration and sell them off.
The White House has not released any details on how the new administration plans on reducing its backlog, but a source familiar with the matter said the administration would not reduce the number of warehouses, nor would it sell off services.
The Chamber report estimates that if the administration does not act quickly, the U.:y could lose up to $500.7 million in logistics contracts in 2019, which would total nearly $1 million in losses.
The report estimated that the loss could rise to $1,900 million if the government did not act.
The group also estimates that about 1,100 warehouses could be sold off, which it says would bring the total number of warehouse contracts to 2,200, bringing the total to about $2.5 billion.
The U.:s largest commercial warehouse operator, Wackenhut, is facing a $4.8 million loss, the report estimates.
Wackenhuts main business is transporting and storing food products, but the company has been trying to save money by selling off its warehouses.
It is currently operating warehouses at four locations in the Washington area.
Wakenhut said it is working on a plan for what will happen to its warehouses, but said that it would not be able to do so until Congress approves the budget request.
“We are trying to come up with a plan that addresses all the needs of the business, and we’re confident that it will work out,” spokesman Tom Schulman said.WAKenhut was able to find enough warehouse space for 2,500 people to work at one warehouse, Schulmann said, and that it had been able to keep costs down.
“It’s very hard to find the right space for the business in the current market environment,” Schulmans said.
“Wakenhut has been able so far to save about $1 for every $1 invested in the warehouse.”
The National Association for Manufacturers says it opposes the move, arguing that the Trump Administration has not done enough to ensure that the warehouses are managed appropriately.
“The warehouses have not been run properly for a long time, and this is not the first time we’ve heard the administration say they are not going to be able run warehouses, even as they are selling off assets, and they have been able,” said Paul Ryan, president of the group.
“That’s not the kind of leadership we expect from the Trump government.”