Back in business with PL 480

Trial shipment might renew interest among carriers in moving Food for Peace shipments through the Lakes

A railcar full of bagged peas from Idaho
arrived in port in mid-July. The cargo was the last of 1,390 metric tons of peas due to depart later that month to West Africa via a Canfornav, Montreal, vessel as part of a Public Law 480 Food for Peace shipment.

It may have seemed like a small amount of peas for peace, but the shipment was a sign that the Great Lakes system could soon increase its share of processed goods being exported by the U.S. Department of Agriculture under the PL 480 Title II program.

PL 480 is a federal program that sends food aid to developing countries. Title II items are mainly processed and bagged products for humanitarian aid.

The Great Lakes are an efficient supplier of Title II products with their proximity to agricultural producers and the St. Lawrence Seaway system for small ships compatible with ports in many developing countries. And in the past the trade has been worth about $100 million a year to farmers, workers and businesses in the region. PL 480 cargoes generated an estimated $250,000 in terms of business activity for each port visited.

Duluth-Superior, an active participant in the program since the mid-1960s, invested millions of dollars by both the public and private sectors for the construction, acquisition and maintenance of the docks, buildings and specialized equipment to handle these cargoes.

But in 1985 the cargo preference law pertaining to PL 480 was amended to increase the U.S. flag requirement on such cargoes from 50 to 75 percent. This law, which went into effect in 1986, killed the Lakes' PL 480 participation because the cargo awards that were left for all-flag competition under the remaining 25 percent were too small to induce ships to make the long trip up the St. Lawrence Seaway into the Great Lakes.

U.S. vessels didn't need to make special trips to Great Lakes ports because under the cargo preference system the USDA directs the cargo to them. The Great Lakes tried but were unable to get regular U.S. flag ocean carrier service. With no carriers submitting bids for Great Lakes' ports in the all important first round of bidding, the Lakes could not be retained as part of lowest landed cost routing.

The Great Lakes did receive about 240,000 tons of PL 480 per year for fouryears under a Great Lakes Set-Aside arrangement, but the last PL 480 cargo until this year moved through the Port of Duluth-Superior in 1991.

Now, Great Lakes port authorities and stevedores are working together to approach foreign-flag ship operators to resume the bidding process. Suzanne Bleau-Myrand, marketing director for Fednav, Montreal, has been spearheading the effort to see a return of non U.S.-flag carriage for portions of the USDA allotments.

Although the parcel via Duluth was considered only a trial shipment because of its small size, it is hoped that it will renew interest in carriers moving PL 480 cargo via the Great Lakes.