MarAd seeks comments on “fair and reasonable” rate policy
MarAd seeks comments on “fair and reasonable” rate policy
The U.S. Maritime Administration said it will take comments regarding its current “fair and reasonable” rates policy for U.S.-flag vessel operators involved in the transport of government-financed aid shipments.
MarAd is responsible for capping the maximum amount that a U.S.-flag vessel operator can charge the government to transport its cargoes overseas. The agency calculates the cap based on information routinely collected from U.S.-flag vessel operators.
The agency calculates the average daily costs twice a year for four categories of ships: less than 10,000 deadweight tons, 10,000 to 19,999 deadweight tons, 20,000 to 34,999 deadweight tons, and greater than 35,000 deadweight tons.
MarAd’s fair and reasonable rate methodology, however, has become a contentious issue for U.S.-flag carriers. Many carriers believe the methodology is unfair, inflexible and does not take into account other cost factors such as vessel positioning, weather delays, hold cleanings, insurance, stowaway prevention and security.
The methodology has received increased scrutiny as many U.S.-flag vessel operators find that their vessels are now generating more revenue competing against foreign-flag carriers in the commercial bulk trades.
MarAd’s Office of Financial and Rate Approvals held a meeting with U.S.-flag carrier representatives in Washington Tuesday to discuss concerns with the agency’s fair and reasonable rate calculation methodology.
The agency said it will continue to take comments from the U.S.-flag vessel industry. Comments should be sent either by post to Michael Ferris, director of the Office of Financial and Rate Approvals, U.S. Maritime Administration, 400 Seventh St., S.W., Washington, D.C. 20590, or by e-mail at michael.ferris@marad.dot.gov.
For more information about the fair and reasonable rate debate, read the May American Shipper, pages 64-68.