50 Percent Cargo Rule Arouses Concern in Israeli Shipping Circles

Israel maritime circles have expressed concern that the United States, for the first time, is implementing a provision of the Foreign Aid Bill that stipulates that at least 50 percent of government cargoes must be carried in American flag ships. Although this clause has been in effect for many years with respect to grain and other civilian aid cargoes, it has been waived in the case of U.S. military hardware shipped to Israel.

The bulk of those shipments were carried by freighters of the Zim Lines, Israel’s national shipping company. But beginning Jan. 1, the 50 percent law was invoked and Zim must now share military cargoes with the American Export Lines the only American shipping company maintaining regular service between the U.S. and Israel. Israeli shipping circles fear that the loss of a substantial portion of this high revenue freight will affect Zim’s earnings and the employment of Israeli seamen.

The latest development coincided with the announcement this week that Maritime Fruit Carriers Ltd., Israel’s largest privately owned shipping company, has ceded control to a consortium of foreign creditors and will cease to be an Israeli firm. The company’s headquarters will be moved from Haifa to London.

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