Study Says US-Flag Ships Cost More to Operate

U.S.-flag merchant ships spend on average 2.7 times more to operate their vessels than their foreign competitors, largely because labor and benefits cost American operators nearly twice as much, according to a study sponsored by the Maritime Administration.

The cost of labor is one of the major factors that make competition in the international marketplace difficult for U.S.-flag operators, according to Pricewaterhouse Coopers’ report. 

There are 110 oceangoing ships under the U.S. flag, and about half of them are in the Maritime Security Program. On the other hand, U.S. owners operate 540 ships under 31 foreign flags.

U.S. mariners earned more than five times mariners aboard foreign vessels in 2010, the report says. On average, daily labor costs aboard a U.S.-flag ship were $13,655 compared with $2,590 aboard a foreign-flag vessel.

Congress instructed Marad to conduct the study last year. The findings are intended to help the agency find better ways to promote U.S.-flag shipping. 

Source: Journal of Commerce