U.S. Shippers Reportedly Raised Famine-Relief Fees

While world shipping costs declined over the last 17 months, American ship operators raised their fees to carry famine-relief cargo to Africa by $10 a ton, according to a newspaper report Sunday.

The rate increases, when added to the high costs of using American ships, have required the government to spend $34 million more than it would have cost to send the African food aid by foreign ships, the Philadelphia Inquirer said.

U.S. laws require that at least half of all government-sponsored cargoes be carried in American ships, in order to ensure a strong merchant marine for commercial and national security purposes.

The average cost of carrying emergency relief cargoes to Africa on American ships has risen from $105 a ton during 1984 to an average of $115 a ton so far this year. In comparison, average rates for foreign ships hauling the same cargoes dropped from $69 a ton in 1984 to $58.50 this year, according to the Inquirer.

Stephen Kearns, a vice president at Daniel F. Young Inc., a New York freight forwarder that books many relief cargoes, said the different costs are related to a recession in the business. He said foreign shippers may be operating at losses to keep their ships active and may quote low rates for trips to African ports in order to win more lucrative return trips with African exports to the United States.

Edmund T. Sommer Jr., counsel to the Council of American Flag Ships, denied U.S. shippers are “gouging” the government. He said there have been dramatic increases in the costs of shipments.