Use of Great Lakes Ports and the St. Lawrence Seaway for Government Export Shipments

LCD-80-87: Published: Jul 24, 1980. Publicly Released: Aug 25, 1980.

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GAO responded to a congressional request to investigate maritime shipments by the Department of Defense and the Department of Agriculture to determine whether the Government is shipping goods overseas by the most economical route, the port closest to the point of origin of the shipment, and if not, why the Government agency is not using the closest port. GAO determined that an examination of all Government shipments would be nonproductive in view of existing cargo preference laws, seasonal disruption of Great Lakes shipping, and the infrequency of U.S.-flag service to Great Lakes ports. GAO agreed to provide the background information it had developed to explore the shipping plans of U.S.-flag carriers for providing service to Great Lakes ports during the 1980 shipping season.

Applicable laws and regulations do not, in themselves, prevent the movement of Government cargoes through Great Lakes ports. Other factors, however, negatively affect the selection of Great Lakes ports for overseas movement of commercial, as well as Government, cargoes. These factors include: (1) prohibitions on the use of foreign flag vessels for U.S. Government cargoes, cargo preference laws; (2) infrequent service by regularly scheduled U.S.-flag carriers; (3) the winter interruption of the shipping season; (4) the shallow channel which limits the loads of certain ships; (5) proportionally lower rates of coastal ports; and (6) the decline in ocean liner service. The Department of Agriculture's shipping procedures are based on the general principle of awarding contracts where the lowest landed cost will prevail considering the availability of ocean service, adequacy of service, port performance, and transit time. The majority of exported cargoes destined to India for the past several years explains the high percentage of traffic off the west coast, and the large amount of traffic bound for Africa explains the high percentage of traffic off the gulf coast. GAO believes Agriculture's current procedure for choosing carriers and ports for export of commodities, if properly implemented, is reasonable and fair.

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