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Program Assessment


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Maritime Administration Ocean Freight Differential

The difference in shipping costs between a U.S.-flag ship and foreign.-flag ship is called ocean freight differential. This program reimburses U.S. government agencies for most of the cost of ocean freight differential incurred when shipping foreign food aid.


What This Rating Means

Moderately Effective

In general, a program rated Moderately Effective has set ambitious goals and is well-managed. Moderately Effective programs likely need to improve their efficiency or address other problems in the programs' design or management in order to achieve better results.
  • In accordance with national economic and security policies, the program provides an economic incentive to owners of U.S.-flag merchant vessels to maintain their U.S.-registry. Food aid grants to foreign nations represent 30 percent of all preference cargoes. Participation remains significant: approximately 90 percent of U.S.-flag vessels carry food aid cargoes.
  • The backlog of payments in arrears to federal agencies shipping food aid to foreign beneficiaries has been corrected and made current. A prompt payment process has been established and further process upgrades are being tested in pilot programs.
  • Compliance with cargo preference law impacts the flexibility of the delivery of foreign food aid. There is interagency disagreement regarding both the interpretation of and compliance with cargo preference law. In the absence of enforcement authority, accountability for minimum standard compliance has devolved to the courts.

Improvement Plan

About Improvement Plans

We are taking the following actions to improve the performance of the program:

  • Completing an evaluation with partner government agencies on the efficacy of an electronic vendor payment system to further improve the payment process.
  • Negotiating policies that reduce flexibilty challenges in the administration of foreign food aid in compliance with cargo preference law.
  • Joining with partner government agencies to develop revised regulations to improve compliance rates with cargo preference law and minimize litigation from supply chain partners in the private sector.

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The content on is developed by the U.S. Office of Management and Budget and Federal agencies.