Total Transportation - The Key To Lower Delivered Costs

The cost of transporting mineral raw materials and products will receive greater attention in the next 10-20 years because raw material sources and markets are changing. Today, shipping costs may equal 20%-80% of the landed or delivered cost of raw materials and products. Companies are learning that total costs are what count to the company and customers. Transportation has historically been priced at "What the traffic would bear" and little real effort has been made to analyze the shippers problem and provide them with effective and low cost transportation. This climate existed in both ocean and rail transport. The shiplines and railroads did not understand the shipper's problems and few shippers understood transportation and how to buy it. Recently more consideration has been given to the advantages between the American Merchant Marine- American Flag and Foreign flag vessels. The discussions held focused on what action is desirable to encourage American flag operations. Based on extensive studies made by both A. E. Gibson, Maritime Administrator and R. J. Blackwell, Deputy Maritime Administrator, the resulting statistics show that the potential for ocean transport is as follows: U. S. Foreign trade is estimated at 620 million long tons annually in the early 1980's. It was 418 million tons in 1968. In 1968 only 6.4% of the U.S. ocean borne trade was carried on American Flag vessels. About 50 million tons of early 1980's trade will go ill container ships. That leaves over 500 million tons to go as bulk or "neo-bulk" cargo.