Average US vessel operating costs last year were almost three times higher than their international counterparts, according to a report from MARAD, the US maritime administration body.
The report, Comparison of US and Foreign-Flag Operating Costs, says: “US flag-carriers are at a distinct disadvantage in their ability to compete in international transport markets.”
The comparison used aggregate average total operating costs.
MARAD also found that average operating costs for US-flagged containerships and ro-ro vessels in particular were generally three times higher than foreign-registered ships.
Difference in crew costs were even more noticeable – roughly 5.3 times higher for US-flagged vessels in 2010, even though their average crew size is slightly smaller. Crewing costs on US bulk carriers were 5.7 times higher.
The report attributes the higher operating costs to regulatory requirements on vessel labour, insurance and liability, maintenance and repairs, taxes and expenses associated with environmental compliance, higher wage rates and social benefits.
The report also notes that approximately 110 ships fly the US flag, while more than 540 US-owned vessels are registered in 31 other countries, presumably to reduce costs.
The report also suggests several options MARAD may pursue to encourage participation in the US fleet.
These include promotions and missions to secure additional streams of commercial cargo for US-flagged vessels, encouraging US companies to support domestic industry by using US vessels and providing information on annual cargo preference volumes to assist carriers with business planning.
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