USAID urges PVOs to get serious on late vessel arrivals
With fewer U.S-flag vessel operators engaged in transporting international food aid, the federal government says it’s realized a rapid rise in freight rates and a deterioration of service.
The U.S. Agency for International Development wants the private voluntary organizations (PVOs), such as CARE, Catholic Relief Services and World Vision, to more closely monitor carrier performance, especially with on-time arrivals, and report these findings back to the agency.
PVOs’ bulk charter parties and booking notes have specific clauses that allow them to cancel a vessel if the carrier exceeds its scheduled arrival.
“Take advantage of those clauses,” said Denise Scherl of USAID’s Office of Acquisition and Assistance, to members of the Food Aid Consultative Group in Washington Wednesday. “We have to get them to understand that their vessels need to be on time.
“You’ll certainly get support from us,” she added.
The average freight rate for food aid shipments to East Africa, for example, has risen from about $104 per ton in April 2004 to more than $250 per ton today. Some of that increase is due to rising bunker fuel costs, Scherl said.
Several carriers dominate the food aid business, namely Maersk and its subsidiary companies, Liberty Shipping Group and Sealift.
USAID is concerned that competition will continue to shrink as more ships leave the U.S.-flag fleet and carriers drop out of the business.
The Maritime Administration recently approved the sale of two Maersk Line Ltd. U.S.-flag combination container and roll-on/roll-off vessels to an Italian ship operator. The vessels “Maersk Alaska” and “Maersk Arizona” were once prominent providers of lift for food aid shipments, Scherl said.
IMC, a sizable vessel operator in the food aid transport business through 2005, slid into bankruptcy and left the market.
Ellen Levinson, executive director of the Coalition for Food Aid, which lobbies Capital Hill on behalf of PVOs and cooperatives, agrees with USAID that improvements to carrier service are important. However, she noted that PVOs should work closely with their freight forwarders to fix these problems.
“PVOs depend a lot on their forwarders to communicate with the shipping companies,” Levinson told Shippers’ NewsWire. “The question is how to capitalize on the information” to improve carrier performance.
USAID urges PVOs to get serious on late vessel arrivals
