U.S. Flag Ships cost vs benefit

Cost

You pay more in taxes and employee costs.

Benefits

1) You get an English speaking well trained staff.
2) Your ship is eligible to carry USAID cargo
3) If you get hijacked, the U.S. Navy comes to your rescue.

Most ships fly what is called a "flag of convenience" from some country which doesn't have a Navy, but basically only an office to issue documentation for the ships.

As I mentioned back in December - pay attention people!

Most ships sail under a "flag of convenience", countries where it is cheap to form a corporation, but which of course do not have a Navy. Generally Marshall Islands, Panama, (use to be Liberia but I think that has changed)

You would think people would research these things before they open their mouths.

This today in a CNN article.

In our view, what France and the U.S. has done is exactly the right thing for a flag state to do, and if all flag states were to take that kind of robust action against the pirates we would not have the problems of Somali piracy to the extent that we have today," said Capt. Pottengal Mukundan, director of the piracy reporting center at the International Maritime Bureau.

Right. How many warships ships from Liberia, Panama, or even Greece for that matter are patrolling the oceans?

And this guy is the director of the piracy reporting center?

Must have been a politician before this job.

You would think someone involved in international shipping would know better.

U.S. Flag vessels required for USAID shipments

USAID issued a press release informing what cargo was onboard the hijacked Maersk Alabama.

It also mentions the reason the Maersk Alabama was re flagged to be a U.S. Flag vessel (even though it was built in Taiwan), was to be eligible to carry what we always referred to as "Cargo Preference" shipments.

Per the Cargo Preference Act of 1954, as amended, generally seventy-five percent of all USAID food aid shipments must be transported on U.S. flagged carriers.

And, from the Marad web-site

Cargoes procured, furnished, or financed by the United States Government requires that at least 50 percent of the gross tonnage of all Government-generated cargo be transported on privately owned, U.S.-flag commercial vessels to the extent such vessels are available at fair and reasonable rates. In 1985, the Merchant Marine Act of 1936 was amended to require that the percentage of certain agricultural cargoes to be carried on U.S.-flag vessels be increased from 50 to 75 percent. (See Food Security Act)

USAID Food Aid Aboard Maersk Alabama

FOR IMMEDIATE RELEASE
April 09, 2009

* The MV Maersk Alabama is transporting nearly 8,150 MT of USAID P.L. 480 Title II food aid commodities.
* These commodities are valued at approximately $5.3 million and freight valued at $2.1 million. USAID is providing the transportation funding through grants to implementing partners.
* This food aid shipment from the United States contains vegetable oil, corn soy blend, wheat and dehydrated vegetables and will be distributed in Kenya, Somalia, and Uganda by USAID's implementing partners including the World Food Program and Private Voluntary Organizations.
* USAID currently provides life-sustaining food aid to 3.2 million Kenyans, 3 million Somalians and 1.2 million Ugandans.
* The United States is the largest provider of food aid worldwide. In fiscal year (FY) 2008 alone, USAID provided more than 2.6 million metric tons of food, valued at more than $2.6 billion, benefiting people in 49 countries on four continents.
* Per the Cargo Preference Act of 1954, as amended, generally seventy-five percent of all USAID food aid shipments must be transported on U.S. flagged carriers.