Operating Differential Subsidy

Summary of Operating Differential Subsidy

A grant provided by the Federal government to U.S. firms that operate American-built vessels over certain prescribed trade routes deemed essential to American commerce. The object of the subsidy is to reduce the net operating costs to American shipping firms so as to permit them to compete against lower-cost foreign operators.

The trade routes on which subsidies are offered are essentially those that were laid out in 1981 by the Maritime Administration. During Fiscal Year 1983, operating subsidies amounted to $368.2 million.

(Main Author: William J. Miller)