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DOCUMENT RESUME
03668 - -A2!136321
tOpportunities to Reduce the Ocean Transportation Costs of P.L.
480 Commodities]. B-95832. September 7, 1977. 9 pp. + 2
apr'endices (3 pp.).
Report to Secretary, Department of Agriculture; by Henry
Eschwege, Director, Community and Economic Development Div.
Issue Area: ransportation Systems and Policies: National
Policie.- and Programs (2406).
,:- ntact: Community and Economic Development Div.
Budget kunc, ion: commerce and Transportation: Water
Transportation (406).
Organization Concerned: Maritime Administration; Commodity
Credit Cord.
Congressicnal Lelevance: House Committee on Agriculture; Senate
Committee on Agriculture, Nutrition, and Forestry.
Authority: Cargo Freference Act of 1954 (P.L. 84-664).
Agricultural Trade Development and Assistance Act of 1954
(P.L. 84-480).
7le Cargo Preference Act of 1954 requires that at least
50 percent of the tonnage shipped under U4S. Government-financed
programs be carried on privately-owned U.S. flag vessels. A
review of the Maritime Administration's regulation and
monitoring of the U.S. Cargo Preference Laws involved the
exam4naticn of the Department of Agriculture's compliance with
this requirement for ocean shipments made under title I of the
Agricultural 7rade Development and Assistance Act of 1954.
Findings/conclusions: Generally, the Department of Agriculture
was complying with the cargo preference requirement, and U.S.
flag vessels were carrying at least 50 percent of the tonnage
shipped under title I of the program. However, ocean freight
differential payments, which totaled about $12 million in fiscal
year 1976, could te reduced if greater consideration were given
to a country's total commodity requirements when allocating
shipments amcng U.S. flag and foreign flag vessels. Further
savings appeared possible if, in addition to considering a
particular country's requirements, consideration were also given
to en entire geographic region's requirements. When freight
rates for two or more purchase authorizations are available
simultaneously, the Department should approve U.S. flag vessels
for shipments involving the lower ocean freight rates and
foreign flag 7essels for shipments involving the higher ocean
freight rates. Recommendations: The Secretrry of Agriculture
should direct the Office of the General Sales Manager to modify
current procedures to consider a country's total commodity
requirements in the shipment allocation process. The revised
procedure should empbasize shipping commodities with the lowest
ocean freight differential on U.S. flag vessels, whenever
feasible, to meet the cargo preference requirement. The Offices
of the Geieral Sales Manager and Audit should ezpeditiously](ViewImageLocal?handle=hein.gao/gaobaagtr0001&div=1&collection=&method=preview&ext=.png&size=3)