All Food Aid To Be Transported On U.S. Vessels

The Lempert Report
August 02, 2017

Reuters reports that President is preparing to sign an executive order that will require all U.S. food aid to be transported on American ships.

Currently, 50 percent of such aid must be transported on U.S.-flagged vessels, a move likely to stir opposition from both Republicans and Democrats.

The report says it is unlikely to have any significant effect on the $4 trillion global cargo shipping industry, and may actually slow down food aid getting to millions of people and do little to create jobs, on of the pillars of the America First platform.

To put in context, the United States is the world's largest provider of humanitarian assistance, and spent about $2.8 billion on foreign food aid in 2016. About half of those dollars are actually spent on shipping and storage, the other half on the foods themselves.

Here is the problem with the premise: The American Enterprise Institute, a conservative group, said in a November report that shipping food aid on U.S.-flagged vessels costs 46 percent more than aid shipped at internationally competitive rates and can take as much as 14 weeks longer. And costs would also be far higher by eliminating competition for shipping contracts with lower-cost international carriers, requiring more U.S. taxpayer dollars to feed fewer people.

Those who are pushing the bill say that U.S.-controlled food shipments are important for national security because the U.S. fleet could be transferred to the military in case of a conflict. Although the reality is that most cargo ships are too slow for use by the 21st century military; yet alone being equipped with the proper artillery or supplies.

Senator Bob Corker, the influential Republican chairman of the Senate Foreign Relations Committee, and Democratic Senator Chris Coons have been especially vocal critics of the shipping requirement and have filed legislation to ease the current requirement.  Both senators have told the White House this order would not be supported in Congress.